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Standard Project Agreements (hub DBFM & NPD Model) User's Guide

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1. 3 1 2 the Transfer Amount will subject only to any HM Revenue amp Customs limits that may still apply be wholly applied in the Broadly Comparable Scheme for the provision of the benefits mentioned in this paragraph 4 116 and 3 1 3 the Broadly Comparable Scheme provides in respect of each Transferring Member such benefits as the Administering Authority s Actuary certifies to be of actuarially equivalent value in accordance with the Actuary s Letter 17 to the benefits which would have been payable under the LGPS in respect of the Transferring Members service before the Relevant Service Transfer Date if he had remained a member of the LGPS 4 Additional Voluntary Contributions Nothing in this Section 4 LGPS Bulk Transfer Terms of Schedule Part 24 Employment and Pensions shall apply to AVCs or to benefits secured by them However the Authority shall use reasonable endeavours to ensure that the assets representing each Transferring Member s AVCs in the Fund if any shall be transferred to the Broadly Comparable Scheme Project Co shall procure that the Employer shall ensure that the Broadly Comparable Scheme provides benefits for each Employee Transferring Member which are equivalent to the assets transferred 5 No Assistance Sub hubco Project Co shall procure that the Employer shall not encourage or initiate or assist or facilitate any action or provide any financial assistance for the purpose of requiring the 14 The form of
2. Projects funded using NPD principles will pay a fixed return to the holders of the subordinated debt of the SPV All other distributions to equity i e the holders of the shares and subordinated debt of the SPV will be prohibited Surpluses arising after satisfying all precedent lines in the cash cascade subject to any agreed prudent reserve will either be payable to the Authority either in lump sums as they arise or used to reduce the future service payments Other key features of the NPD model are e Corporate structure the Authority will contract with an SPV referred to in the Standard Project Agreements as Project Co which will be majority owned and controlled by the private sector investors The Authority will own a golden share in the SPV which gives it certain controls over the corporate governance and management structures within the SPV The SPV s articles of association must incorporate the mandatory NPD articles produced by the SFT that enshrine the fundamental principles of the NPD model e Public Interest Director One of the SPV s directors will be appointed by the SFT The Public Interest Director will bring an independent voice to the SPV s board and ensures a greater degree of transparency and accountability e Refinancing Under the NPD model the Public Interest Director has the right to instigate a refinancing on the same basis as an Authority may instigate a refinancing under SoPC4 guidance Furth
3. to the list of Compensation Events in Clause 29 10 4 Alternative Clause 11 9 1 drafting for multi site projects Page 55 of 9491 SCOTTISH FUTURES TRUST Where Clauses 11 3 to 11 11 are used the following definitions should be added to Schedule Part 1 Adverse Planning Decision means a decision by a Relevant Authority pursuant to which the Planning Approval is amended revoked quashed or otherwise rendered ineffective Planning Challenge means in respect of the Planning Approval the occurrence of either of the following within three months of the date of the grant of the Planning Approval a an application for judicial review under Chapter 58 of the Rules of the Court of Session or any statutory challenge or appeal which proceeds on principles similar to judicial review or b a statutory challenge under section 239 of the Town and Country Planning Scotland Act 1997 in either case i other than by Sub hubco Project Co or any Sub hubco Project Co Party and ii on grounds other than Sub hubco s Project Co s or a Sub hubco Project Co Party s failure to comply with statutory procedure and other than the commission of an unlawful act or acts by Sub hubco Project Co or a Sub hubco Project Co Party Planning Challenge means in relation to a Planning Challenge Dismissal a a decision by a Relevant Authority pursuant to which the Planning Challenge is dismissed or otherwise r
4. 3 or otherwise specifically provided for in terms of this Agreement the School Representative shall have no power or authority to bind the Authority or vary the terms of this Agreement in any way and Sub hubco Project Co acknowledges that it shall not act on the instructions of or as a consequence of or otherwise rely upon any act or omission of a School Representative for the purposes of this Agreement unless under a specific delegation issued pursuant to Clause 3 or otherwise specifically provided for in this Agreement The Authority s Representative may from time to time by notice to Sub hubco Project Co delegate any of his powers duties or responsibilities under this Agreement to a School Representative subject to such terms and conditions and for such duration as may be specified by the Authority s Representative Page 50 of 9491 SCOTTISH FUTURES TRUST Form 2 Asbestos 10 5 10 6 10 7 10 8 10 9 10 10 Subject to Clauses 10 6 to 10 13 below Sub hubco Project Co shall be responsible for and shall hold the Authority harmless from the removal of any Asbestos at the Site s and the Authority shall have no liability in respect of the removal of any Asbestos at the Site s other than as set out in Clauses 10 6 to 10 13 Prior to the commencement of the Works at a Demolition Site Sub hubco Project Co shall procure 10 6 1 the appointment of an Asbestos Surveyor in accordance with Clause 10 7 and 10 9
5. Clause 39 in Version 1 included an Authority Event of Default that would be triggered by the Authority s failure to provide access to allow the SPV to carry out Project Co s Sub hubco s Remedial Services This has been deleted in Version 2 the rationale being that the Authority s failure to provide access for the SPV to perform any of its obligations under the Agreement is already covered by the Authority Event of Default in Clause 39 1 1 and there is no reason to treat the private sector s ability to access the Facilities for the Project Co s Sub hubco s Remedial Services any differently from its ability to access the Facilities for performance of any of its other obligations 40 1 1 Delete limb e if all relevant parties are incorporated and resident in Scotland 40 1 2 If it is critical for project specific reasons to meet the scheduled date for completion the Authority may need to include an earlier trigger which would enable it to terminate prior to the longstop date if it became clear at a given point in time that the longstop date was incapable of being met 40 1 6 The Authority should note that this provision is intended to address the situation where the SPV is responsible for a significant contravention of health and safety law which would in the Authority s perception make the SPV s position untenable but might not otherwise be caught by the material breach event of default at Clause 40 1 3 a
6. Comment being made available within an agreed time thereafter The Authority should list any other manuals required 18 8 This Clause may be deleted if not relevant 19 6 The discovery of fossils and antiquities is treated as a Relief Event entitling the SPV to an extension of time in accordance with Clause 29 but leaving the financial risks of such discovery with the SPV If there is a known problem on the Site the provisions relating to discoveries may need to be reviewed and amended on a project specific basis 21 Any provisions relating to IT to be included on a project specific basis 22 In schools projects it was usual to include drafting to deal with different types of use of the Facilities by the Authority during the school day during additional hours and for third party use and sometimes managing third party use was transferred to the service provider with arrangements for sharing income derived from third party use Under the more limited scope of the services this drafting may no longer be relevant especially if the service provider is not responsible for controlling the opening and closing of the Facilities If however an Authority considers that it wishes to make provision for some of or all of these arrangements it should refer to the drafting based on the former standard schools project agreement in Form 6 in Appendix 2 23 There are no deductions during periods when planned preventative
7. because there may not arguably be a material impact on the provision of the Community Services 40 1 9 This and the next ground as well as the triggers in Clause 24 3 Warning Notices need to be calibrated and related to the performance measures in Schedule Part 12 Service Requirements and the requirements of Schedule Part 14 Payment Mechanism 42 2 Drafting for Authority break points has been provided The Authority should consider carefully whether it requires one of more specific break points when it can terminate the contract at a pre agreed cost in terms of compensation Any Authority wishing to include this drafting must consult the SFT If this is not required Clause 42 2 should be deleted 45 Hub This Clause contains the Authority s remedy for breach by the SPV of the equity return sharing capping provisions in Clause 36 NPD This Clause contains the Authority s remedy for breach by the SPV of its obligations to pay Surpluses and comply with the NPD Requirements 46 In Version 2 Clause 46 4 has been amended to capture both Authority Voluntary Termination and Authority Termination on a Break Point Date as the compensation on termination payments for both these scenarios are detailed in the same Section of Schedule Part 17 The drafting that appeared as Clause 46 6 in Version 1 has been deleted as a consequence 24 SCOTTISH FUTURES TRUST Clause Comment 46 6 to 46
8. s Actuary cannot subsequently agree the Employee Transfer Amount within one month or such longer period as shall be agreed between the parties of the objection then the amount shall be determined by an independent actuary to be nominated by the relevant Administering Authority and the Employer jointly or if they cannot agree by the President of the Faculty of Actuaries on application by either party The independent actuary shall act as an expert and not as an arbitrator and his decision shall be final and binding on the parties The independent actuary s costs shall be payable equally by the Administering Authority and the Employer Payment to the Broadly Comparable Scheme of the Transfer Amount shall only be made on the following conditions 2 6 1 the Transfer Amount has been agreed or determined under paragraph 3 4 or 3 5 and in accordance with the LGPS Administration Regulations 2 6 2 the Employer has complied with all its obligations under this Section 4 LGPS Bulk Transfer Terms of Schedule Part 24 Employment and Pensions and 2 6 3 the trustees of the Broadly Comparable Scheme have confirmed in writing that a a payment should be made in accordance with the LGPS Administration Regulations and that they shall accept payment on the terms set out in paragraph 4 b they shall accept liability for each Transferring Member s accrued contracted out rights under the Fund and c they shall accept the Transfer Amoun
9. The Authority s shares of excess profits may either be paid to it in lump sums or be used to reduce the future service payments Multi occupier facilities Where there will be more than one user of the facilities one Authority from among the Participants will be the lead Authority Only the lead Authority will normally enter into the Project Agreement with the SPV The lead Authority will in turn have appropriate back to back contractual arrangements with the other users Authorities may wish to consider whether the SPV should be required to procure collateral warranties in favour of the other authorities as well as those in favour of the lead Authority In most case it is likely that the facilities will be owned by the lead Authority However in certain cases they will be owned by the SPV or held by it on a ground lease In that case the parties will also enter into a lease of the facilities and there will be no title warranty by the lead Authority Any intention to move away from these positions should be agreed in advance with the hub Programme Delivery Office in SFT SCOTTISH FUTURES TRUST Chapter 4 NPD projects The NPD model version of the Standard Project Agreements is for use on revenue funded accommodation NPD projects Key features The NPD model is defined by the broad core principles of e enhanced stakeholder involvement in the management of projects e no dividend bearing equity and e capped private sector returns
10. and 10 6 2 that the Asbestos Surveyor appointed in accordance with Clause 10 7 and 10 9 carries out an Asbestos Survey and submits an Asbestos Survey Report in respect of the relevant Demolition Site Sub hubco Project Co shall seek competitive tenders from a minimum of 3 persons competent to carry out Asbestos Surveys on the basis that the successful tenderer shall provide 10 7 1 Asbestos Surveys in respect of all of the Demolition Sites and 10 7 2 for each Demolition Site as soon as reasonably practicable after the relevant Asbestos Survey has been carried out an Asbestos Survey Report in a format suitable for pricing by a Licensed Contractor tendering for the Asbestos Works In parallel with the process referred to in Clause 10 7 above Sub hubco Project Co shall procure competitive tenders from a minimum of 3 Licensed Contractors based on the Type 2 Asbestos Surveys and including a schedule of rates to assist in the pricing of the Asbestos Works As soon as reasonably practicable following receipt of the tenders referred to in Clauses 10 7 and 10 8 Sub hubco Project Co shall submit copies of such tenders to the Authority together with Sub hubco s Project Co s recommendation as to which tenders should be accepted Within 5 Business Days of having received copies of all of the tenders referred to in Clauses 10 7 and 10 8 the Authority shall notify Sub hubco Project Co which tenders to accept provided that f
11. months before the Relevant Service Transfer Date or the Cessation Date as the case may be be offered membership of the Broadly Comparable Scheme with effect from and including the Relevant Service Transfer Date or Cessation Date as the case may be 26 15 2 the Broadly Comparable Scheme shall provide benefits in respect of the Pensionable Authority Employees periods of service on and after the Relevant Service Transfer Date or Cessation Date as the case may be which the Government Actuary s Department shall certify to be the same as broadly comparable to or better than the benefits which the Pensionable Authority Employees were entitled to under the LGPS at the Relevant Service Transfer Date or the Cessation Date as the case may be 26 15 3 H the Broadly Comparable Scheme is terminated a replacement pension scheme shall be provided with immediate effect for those Pensionable Authority Employees who are still employed by Project Co or a relevant Service Provider The replacement scheme must comply with this Clause 26 15 Sub hubco Project Co Undertaking as if it were the Broadly Comparably Scheme and 26 15 4 where the Broadly Comparable Scheme has not been established by the Relevant Service Transfer Date or Cessation Date as the case may be the Pensionable Authority Employees shall be provided with benefits in respect of death in service which are no less favourable than the death in service benefits provided by the LGPS
12. of the project data that can be properly regarded as falling under any of the exemptions in the freedom of information regime These have been indentified in Schedule Part 26 Commercially Sensitive Information with what are thought to be 28 SCOTTISH FUTURES TRUST Clause Comment reasonable periods when the protection of confidentiality may be claimed The Authority should be wary of attempts to widen the scope or extend the duration of the limited contractual confidentiality arrangements in these Clauses and should consider these Clauses in light of any other guidance e g SGHD guidance for NHS boards with which it is required to comply 61 1 4 This could be the Performance Monitoring Report or some other form of report that the SPV is required to produce on a regular basis a report detailing a the Monthly Service Payment Amounts gross and net of Deductions b a breakdown of Deductions incurred c Warning Notices issued and d other payments included within the Monthly Invoices for the quarter e g in respect of changes compensation indemnities etc 61 1 6 Any other information to be listed on a project by project basis 62 2 This should enable the Authority to comply with its obligations under the FOI S A If the Authority wished to go beyond this for instance by referring in addition to other information or to information held by first tier subcontractors on behalf of the SPV this can
13. such period not to include more than 200 School Days Additional Hours means times when a Functional Area is being used pursuant to a request by the Authority pursuant to Clause 22 13 Community Use means use of the Facilities by or at the invitation of the Authority outside School Hours by the Authority or an Authority Party School Day means each day that the Authority requires the use of the Facilities for the delivery of Authority Services in any Academic Year School Hours means each School Day 3 Authority to consider the relevance of this Clause in the context of the level of service being provided by Sub hubco Project Co and the direct costs if any that Sub hubco Project Co will incur as a result of a request for Additional Hours S An Authority should verify the number of School Days against their curriculum requirements Page 61 of 9491 SCOTTISH FUTURES TRUST Form 7 TUPE and Employment Matters No Staff Transfers No Employee Transfer 25 1 25 2 The Authority and Sub hubco Project Co agree that there are no individuals presently employed by the Authority or any other sub contractor of the Authority whose contracts of employment will by virtue of the transfer to Sub hubco Project Co of responsibility for provision of or procuring the provision by Service Providers of any of the Services in accordance with this Agreement and in accordance with the Transfe
14. 5 1 does not apply all Direct Losses incurred by the Authority as a result of any claim against the Authority in respect of any liability to any person who is or has been employed or engaged whether as a consequence of the Transfer Regulations or of the provisions of this Clause 25 by Sub hubco Project Co or any Service Provider in connection with the provision of any of the Services where such claim arises as a result of any act or omission of Sub hubco Project Co or the Service Provider occurring after the Relevant Service Transfer Date and before the expiry or termination of this Agreement BUT the indemnities in Clauses 25 5 1 and 25 5 2 shall not apply to the extent that the claim arises from a wrongful act or omission of the Authority or is in respect of sums for which the Authority is liable pursuant to Clause 25 2 25 6 Clause 49 3 Conduct of Claims of this Agreement shall apply where any claim is made in respect of the indemnities given by Sub hubco Project Co under Clause 25 5 Project Co Indemnities Position on expiry or earlier termination of this Agreement 25 7 On the expiry or earlier termination of this Agreement the Authority and Sub hubco Project Co agree that it is their intention that the Transfer Regulations shall apply in respect of the Page 63 of 9491 25 8 25 9 25 10 SCOTTISH FUTURES TRUST provision thereafter of any service equivalent to a Service but the position shall be determined in accor
15. Authority shall pay to Sub hubco Project Co the Termination Sum together with interest on any Base Senior Debt Termination Amount or Revised Senior Debt Termination Amount element of the Termination Sum at the No Default Interest Rate on or before the date falling 60 days after the Notice Date provided that if the Authority fails to pay the Termination Sum in full by such date interest shall accrue at the Default Interest Rate on any unpaid amount from but not including such date until the date such amount is paid The Authority may other than where payment is to be made pursuant to Section 1 Compensation on Termination for Authority Default and Voluntary Termination of this Schedule Part 17 Compensation on Termination elect to pay the Adjusted Estimated Fair Value of the Agreement or the Base Senior Debt Termination Amount or the Revised Senior Debt Termination Amount as relevant element of the Termination Sum 1 2 1 in instalments as follows a where the Base Senior Debt Termination Amount or the Revised Senior Debt Termination Amount or the Adjusted Estimated Fair Value of the Agreement as relevant is greater than or equal to the Outstanding Principal i in respect of that element of the Base Senior Debt Termination Amount or the Revised Senior Debt Termination Amount or the Adjusted Estimated Fair Value of the Agreement as relevant representing the Outstanding Principal on the dates the Instalment Dates and
16. Funds the Due Date and Actuary s Letter the matters identified herein and any comments from the Administering Authority Definitions In this Section 4 LGPS Bulk Transfer Terms of Schedule Part 24 Employment and Pensions the following expressions shall unless the context otherwise requires have the following meanings Actuary s Letter means in respect of each Fund the letter from the Administering Authority s Actuary stating the methods and assumptions to be used for the purposes of this Section 4 LGPS Bulk Transfer Terms of Schedule Part 24 Employment and Pensions a copy of which is set out as Appendix 1 Actuary s Letter to this Section 4 LGPS Bulk Transfer Terms of Schedule Part 24 Employment and Pensions Administering Authority s Actuary means name of actuary of name of firm or another actuary appointed by the relevant Administering Authority for the purposes of this Section 4 LGPS Bulk Transfer Terms of Schedule Part 24 Employment and Pensions AVCs means AVCs or SCAVCs as defined in the LGPS Administration Regulations Due Date means the date days after the last of the conditions in paragraph 3 6 has been satisfied Employer means Sub hubco Project Co and or any relevant Service Provider who employs a Pensionable Authority Employee from the Relevant Service Transfer Date Employer s Actuary means name of actuary of name of firm or another actuary appointed by the Emplo
17. effect of setting off is merely to reduce the sums payable by the Authority during the re tendering period Paragraph 4 3 3 a A methodology can be agreed in advance for agreeing what constitutes a reasonable risk assessment Paragraph 4 3 3 b This includes both the everyday running costs and the costs of the service and life cycle maintenance costs Forecasts are determined by agreement or in the event of disputes by an expert 17 Section 3 Paragraph 1 2 3 This excludes interest accrued but unpaid but the Subordinated Debt documentation should of course be checked to ensure this is the way it works Repayment of principal is caught through the definition of Subordinated Debt 17 Section 5 This Section 5 replicates with some minor amendments the standard form approach taken to payment of compensation on health projects to date Authorities may wish to use the alternative drafting set out in Form 13 in Appendix 2 in relation to the arrangements for paying compensation on termination Paragraph 1 3 Where the Authority elects to pay in instalments interest shall be calculated on outstanding amounts at a rate between the gilt rate and the senior debt rate Paragraph 1 5 The Authority should review the tax implications of the payment passing through 44 SCOTTISH FUTURES TRUST Schedule Part Comment Authority s control and grossing up provisions may be required as appropriate Paragraph 1 8 This right i
18. ensure that it is tailored to the requirements of the specific project and that its terms and their impact are clearly understood by the Authority The Standard Project Agreements should be used in conjunction with any further guidance issued adopted by the Scottish Government and or the SFT from time to time The Schedule to each Standard Project Agreement contains forms of independent tester contract service provider and construction contractor collateral warranties and sample certificates Their use is not mandatory although justification for deviations from the suggested forms must be provided to the SFT if they are not used Changes to the Standard Project Agreements All changes to the Standard Project Agreements require SFT s approval Normally approval will only be given to changes required for project specific reasons or to reflect changing guidance or demonstrable changing market circumstances The SFT does not intend to apply any previous rules or practices in managing the derogations process The SFT recognises that no drafting is perfect and that the Standard Project Agreements include some new drafting that has not been tested analysed in the context of a live project As part of the derogation process on each project the SFT will be willing to correct errors and consider arguments that drafting in the Standard Project Agreements does not achieve the contractual intention but will not generally entertain proposals to change what
19. is already adequate drafting An Authority must give SFT one month s notice of when it intends to submit a request for derogations which will generally tie in with Key Stage Reviews SFT will endeavour to respond to a request for derogations within 2 weeks In requesting derogations the Authority must provide its amended version of the relevant standard Project Agreement including the Schedule Parts and provide explanations for the proposed amendments in footnotes within its amended document SFT will then do a comparison of the document submitted against its master version of the relevant standard Project Agreement This Guide contains recommendations and drafting to deal with matters that are specific to different sectors and particular circumstances that are commonly encountered Use of these must still be reported to the SFT for approval The main bodies of the Standard Project Agreements include optional drafting to be used in situations where the works will be completed in a number of phases This drafting should be used deleted as appropriate SCOTTISH FUTURES TRUST For ease of future contract management SFT does not expect to see the Standard Project Agreements amended to any individual law firm s house style Clause and paragraph numbering should be preserved through the use of lettered additions and not used deletions Automatic numbering and hyperlinked cross references should be maintained Footnotes still appear in
20. list is incorrect 25 11 1 These details are taken from the SPV s final bid or on a hub project the relevant Stage 2 Submission Authorities and their advisors should ensure that the bid or the Stage 2 Submission contains sufficient detail to ensure that the SPV s workforce assumptions are transparent This will enable the Authority to audit adjustments to the Annual Service Payments to reflect changes in the employee information in the Final Employee List 25 11 2 In other words these costs are the allowance made by the SPV for continuing payments of salary NI pension contributions etc to the workforce it proposes to establish to provide the Services 25 11 3 These costs are the non recurring costs of establishing the SPV s workforce These might include for example possible redundancy costs if the workforce whom the SPV expects to inherit from the Authority does not match the required profile It is assumed for the purposes of this document that any re profiling of the workforce is carried out by the SPV after the Relevant Service Transfer Date The drafting will need to be reviewed if it is agreed that the Authority will undertake this task 25 12 This is how the SPV is compensated for any mismatch between the information it was given about the workforce when preparing its final bid or on a hub project producing the Stage 2 Submission and the correct information based on the actual workforce at the tim
21. of completion to take place The commissioning process is to be developed and agreed on a project specific basis and the Agreement amended as necessary to reflect project specific arrangements Pre completion commissioning is likely not to be relevant in many cases in which event this Clause can be simplified by removing the references to it 17 4 The Authority should describe any other core requirements to be complied with in relation to the SPV s commissioning activities 17 7 2 The Authority should consider what the Authority s commissioning activities if any will entail Parties will need to consider when the Authority s commissioning activities including for example installing of its own equipment will be carried out 17 13 This Clause makes the certificate of the Independent Tester conclusive as regards the Actual Completion Date Payment Commencement Date unless there is manifest error for example a clearly erroneous date bad faith or fraud It is in the interests of both parties that there is certainty about when payment commences Both parties should have remedies under the Independent Tester Contract if he wrongly issues or refuses to issue his certificate Damages claimed from the Independent Tester should always be a sufficient remedy if payment starts prematurely or is wrongly delayed by reason of fault on the part of the Independent Tester 17 18 Documentation to be specified on a project by projec
22. of the Local Government Contracts Act 1997 a court determines that the Authority did not have power to enter into the Funders Direct Agreement and the Funders Direct Agreement is unenforceable but this Agreement remains in full force and effect then without prejudice to the application of paragraph 1 1 1 of this Schedule Part 27 Relevant Discharge Terms at any time thereafter 1 2 1 the Monthly Service Payment shall be reduced by the amount payable by Sub hubco Project Co in respect of the Senior Debt and 23 Drafting assumes that such certificates will be provided at Financial Close Page 81 of 9491 SCOTTISH FUTURES TRUST 1 2 2 the Authority shall pay Sub hubco Project Co a sum equal to the Revised Senior Debt Termination Amount excluding provided that the Senior Funders do not enforce any security over credit balances on any bank accounts held by or on behalf of Sub hubco Project Co limb b i of the definition set out in Section 6 Definitions of Schedule Part 17 Compensation on Termination and the relevant provisions of Clause 46 Compensation on Termination and Section 5 General of Schedule Part 17 Compensation on Termination shall apply mutatis mutandis subject to any reference to the Termination Date in this Agreement shall be deemed to be the date on which the Funders Direct Agreement was declared unenforceable in accordance with the provisions of this paragraph 1 and the Parties agree that such provi
23. on a project by project basis whether it wants to make the SPV responsible for paying Rates and reimburse these as a Pass Through Cost or pay Rates itself 15 Insurance Requirements 15 Sections 1 and 2 Authorities should seek independent advice on the scope and terms of the project insurances In relation to Business Interruption cover the Authority should be named as a co insured party to the extent that it has a demonstrable insurable interest This will be in connection with any additional cost of working insured against under the terms of the policy and not with respect to any loss of anticipated revenue 15 Section 3 The endorsements are recommended drafting Whilst the parties should endeavour to obtain cover in accordance with these wordings if these are not in practice available the parties should obtain the best terms reasonably available in the market at the time 15 Section 4 This contains provisions to oblige the contractor to take steps to procure the project insurances on terms that represent best value for money to the Authority 15 Section 5 This is recommended drafting If agreement to this wording is not in practice achievable then the parties should agree the best terms reasonably available in the 42 SCOTTISH FUTURES TRUST Schedule Part Comment market at the time The SPV s broker may wish to limit its liability and include additional liability wording in the Broker s Letter of Undertaki
24. or former status of the vitiating party as an Insured 53 14 4 Given that insurance premiums are generally a pass through cost to the Authority during the Operational Term it is appropriate for the Authority to have the right to trigger the Uninsurability provisions if it considers that the premiums have reached such a level that the risk is not generally being insured against 53 15 4 Given that insurance premiums are generally a pass through cost to the Authority during the Operational Term it is appropriate for the Authority to have the right to trigger the Unavailability provisions if it considers that the premium for insuring with a particular term or condition has reached such a level that the term or condition is not generally being incorporated in insurance 53 18 This Clause must refer to only such insurances the proceeds of which are to be paid into the Insurance Proceeds Account i e physical damage insurance policies 53 22 1 This will not include for example third party liability employers liability business interruption or advance loss of profits insurance 53 23 to 53 26 The application_ofthese Clauses_tobeThere is a strong presumption against the inclusion of an Economic Reinstatement Test including on projects where the facilities are to be located on a single site The inclusion of an Economic Reinstatement Test op any project will require SFT s express approval and any request for such
25. shall so far as applicable comply with the Authority Policies as regards health and safety at work including the Authority Policy regarding smoking and with those relating to anti discrimination and equal opportunities including those relating to harassment Sub hubco Project Co also shall take and shall procure that every Service Provider shall take all such steps as the Authority may reasonably require which shall include co operation with action proposed or taken by the Authority to ensure that the Authority complies with its duty under Section 3 1 Health and Safety at Work Act 1974 regarding the conduct of the undertaking of the Authority Sub hubco Project Co Indemnities 25 5 Sub hubco Project Co shall indemnify and keep indemnified in full the Authority and at the Authority s request each and every service provider who has or shall provide any service equivalent to any of the Services against 25 5 1 claims in respect of all emoluments and all other contractual or statutory payments unpaid by Sub hubco Project Co or a Service Provider to any person entitled to such payments from Sub hubco Project Co or a Service Provider who is or has been employed or engaged by Project Co or any Service Provider on or after the Relevant Service Transfer Date but prior to the date of expiry or termination of this Agreement and all income tax and pension and national insurance contributions payable thereon and 25 5 2 insofar as Clause 25
26. suspended and the Funders will have a specified period to put into place alternative contractors to perform the project Key issues will include the length of the suspensory period and the liability if any the Funders will incur while trying to save the project Land Matters Section 1 This should include any restrictions on the use of any part of the Site Section 2 This should include any rights over any part of the Site which have been or are being reserved for the Authority and or any third party e g rights of access 34 SCOTTISH FUTURES TRUST Schedule Part Comment wayleaves Section 3 This should include any areas and periods within which the Contractor should have exclusive possession to parts of the Site Construction Matters Section 3 This section will usually include the following e Introduction to what is comprised within the Facilities e Architectural performance specification e Civil Structural performance specification e Mechanical and Electrical performance specification e Thermal and energy efficiency requirements e Area Schedule e Drawings The Authority should also ensure that it includes the wording provided by WRAP to the SFT details of which can be found at http www scottishfuturestrust org uk Any design requirements in relation to thermal and energy efficiency such as those formerly in Clause 12 Design Responsibility of the DBFM template proj
27. that SCOTTISH FUTURES TRUST e the private sector will provide the authority with serviced accommodation e payment will only commence once the accommodation is complete and ready for use and e the Authority will pay for available facilities and deductions will be made from the annual service payment if the facilities are not available or the services are otherwise not provided in accordance with the Authority s requirements Differences in operation between revenue funded facilities and facilities procured using conventional capital funding have been minimised as far as possible on the basis that as far as possible an Authority should be free to operate its revenue funded facilities in the same way as facilities provided using conventional capital funding and that good estate management practices should not depend on the financing route that was used to make the investment in the facilities As such the capital funded design and build contract used in hub closely resembles the construction elements of the Standard Project Agreements and a relatively narrow scope of hard facilities management services has been proposed for the Standard Project Agreements under which the private sector will provide planned maintenance including lifecycle replacement and reactive maintenance to the buildings and hard landscaping In turn this should produce a simplified service specification and associated performance monitoring and contract management arrangem
28. that this will be done on a regular basis Authorities should consider on a project by project basis whether they also wish to take on responsibility for ceilings and floor coverings The drafting allows the SPV to step in 17 SCOTTISH FUTURES TRUST Clause Comment and perform these tasks where the Authority s failure to is likely to have an adverse effect on the Facilities Services and or the SPV s obligations Authorities will need to consider the cost implications of these responsibilities in preparing their business cases for projects They will also need to consider the interface between these obligations and the design and specification of the Facilities i e the impact that the design and specification will have on the Authority s ongoing internal redecoration responsibilities as would be the case on any capital funded project 23 13 2 Include if the Authority wishes to take on this responsibility and adjust the Services Specification 23 13 3 Include if the Authority wishes to take on this responsibility and adjust the Services Specification 23 13 4 Delete if the right to carry out Derogated Low Value Changes is not included in Schedule Part 16 Change Protocol 23 14 Breach of this Clause will be an Excusing Cause by virtue of Clause 51 2 1 23 22 to 23 24 This drafting has been introduced because of the change in risk transfer in regard to Utilities If the SPV makes
29. the Adjusted Highest Compliant Tender Price or any proportion thereof by the date on which payment is due in accordance with paragraph 1 7 or paragraph 1 8 above the Authority shall pay to Sub hubco Project Co interest on such unpaid amount which shall accrue on such amount at the Default Interest Rate from but not including the date on which payment is due in accordance with paragraph 1 7 or paragraph 1 8 above until such amount is paid If the Adjusted Highest Compliant Tender Price is zero or a negative number then on entering into the New Agreement with the New Sub hubco Project Co the Authority shall have no obligation to make any payment to Sub hubco Project Co and if a negative number an amount equal to the Adjusted Highest Compliant Tender Price shall be due and payable by Sub hubco Project Co to the Authority on the date of the New Agreement or where paragraph 1 8 applies within 20 Business Days of notification from the Authority pursuant to that paragraph Full and Final Settlement 2 1 Any and all sums irrevocably paid by the Authority to Sub hubco under this Schedule Part 17 Compensation on Termination will be in full and final settlement of each party s rights and claims against the other for breaches and or termination of this Agreement and any other Project Document whether under contract delict restitution or otherwise but without prejudice to 2 1 1 any antecedent liability of Sub hubco Project Co
30. this Schedule Part 17 Compensation on Termination excluding the Adjusted Highest Compliant Tender Price Page 88 of 9491 Document comparison by Workshare Compare on 11 October 2013 11 17 46 file SERVER 01 RedirectedFolders Annie Robertson My Document 1 ID Documents Workshare Standard Project Agreements User s Guide Version 2 June 2012 doc Description andara Project Agreements User s Guide Version 2 June 2012 file SERVER 01 RedirectedFolders Annie Robertson My Document 2 ID Documents Workshare Standard Project Agreements User s Guide Update October 2013 docx Besenntion Standard Project Agreements User s Guide Update H October 2013 endering set Insertion nsertedcell Deleted oel Moved cell E gesi adding cell CS out Format changed 0 Total changes 36
31. to the Authority which the Authority has been unable to set off pursuant to Clause 46 13 of this Agreement 2 1 2 any antecedent liability of either party to the other that arose prior to the Termination Date but not from the termination itself to the extent such liability has not already been taken into account in determining or agreeing the Authority Default Termination Sum Adjusted Highest Compliant 24 authorities should review the tax implications of the payment passing through Authority s control and grossing up provisions 25 may be required as appropriate This right is granted to give the Authority a claim as an unsecured creditor of the SPV and is not likely to result in any significant recovery for the Authority Page 86 of 9491 2 2 3 Costs SCOTTISH FUTURES TRUST Tender Price or Adjusted Estimated Fair Value of the Agreement the Force Majeure Termination Sum or the Corrupt Gifts Termination Sum as the case may be and 2 1 3 any liabilities arising in respect of any breach by either party of their obligations under Clause 47 6 of this Agreement which arises or continues after the Termination Date If either the Adjusted Highest Compliant Tender Price or as the case may be the Adjusted Estimated Fair Value of the Agreement is zero or a negative number the Authority shall be released from all liability to Sub hubco Project Co for breaches and or termination of this Agreement and any other Project Document wh
32. transfer of benefits must notify the Employer of this consent in writing no later than three months after the date of the invitation The Employer shall provide the Authority and the Administering Authority with the names of the Transferring Members no later than four months after the Relevant Service Transfer Date 2 Transfer Payment from Fund 2 1 In respect of the Pensionable Authority Employees the Authority shall use reasonable endeavours to ensure that the relevant Administering Authority transfers from the Fund to the Broadly Comparable Scheme on the Due Date an amount in respect of the Employee Transferring Members service in the Fund before the Relevant Service Transfer Date calculated in accordance with the Actuary s Letter and Part 9 of the LGPS Administration Regulations 2 2 As soon as reasonably practicable following the Relevant Service Transfer Date Sub hubco Project Co shall procure that the Employer shall promptly provide all data within its possession or under its control which the Administering Authority and the Administering Authority s Actuary may require for the calculation of the Transfer Amount and shall warrant that this data is in all material respects true complete and accurate 2 3 As soon as reasonably practicable following the Relevant Service Transfer Date the Authority shall promptly provide all data within its possession or under its control which the Administering Authority and the Administering A
33. 12 The grossing up provisions are drafted on the basis of compensation payments which are calculated by reference to the return the shareholders subordinated debt holders in the SPV would have received but for the termination If the basis of calculation of the compensation payment differs from this these provisions will need to be considered in the light of such alternative basis of calculation 46 13 The limits on Authority s rights of set off do not apply to compensation payable on termination for the SPV default 47 2 The Authority should include project specific provisions e g relating to equipment IT planning land and Authority assets or information etc The Authority should consider what protection is required to ensure compliance with the handover provisions on a project specific basis taking into account the nature importance and value of the assets that the handover provisions will apply to 47 2 1 The Authority should add other project specific items 47 2 4 The Authority should insert any project specific provisions regarding IT and Equipment etc 49 1 1 This mirrors the indemnity given by the Authority in relation to its employees in Clause 49 2 1 The SPV should manage the risks covered by the indemnity and the fact that there is no carve out for causation by putting appropriate insurance cover in place which it is required by law to do which contains satisfactory non vitiation provision
34. 13 1 Sub hubco Project Co shall deliver to the Authority a VAT invoice for such additional direct costs and associated expenditure calculated on the basis of the schedule of rates set out in the Licensed Contractor s tender Part of the Schedule in each month in which they are incurred together with copies of the records maintained by the Building Contractor and the Licensed Contractor to show the amount of Additional Asbestos removed from the relevant Demolition Site and the associated expenditure during such month and such additional supporting information as the Authority may reasonably request and 10 13 2 the Authority shall pay to Sub hubco Project Co the amount of each such invoice provided that it reflects the records and schedule of rates referred to in Clause 10 13 1 above within 20 Business Days of receipt of the same 10 14 Unless the exposure arises directly or indirectly as a result of any act or omission of Sub hubco Project Co or any Sub hubco Project Co Party the Authority accepts full responsibility including any financial and other consequences which result whether directly or indirectly for death and personal injury in respect of exposure to Asbestos on the Site where the exposure takes place prior to the date on which Sub hubco Project Co Is given possession f the Site for the purposes of carrying out the Works Where Clauses 10 5 to 10 14 are used the following definitions should be added to Schedule
35. LGPS Bulk Transfer Terms of Schedule Part 24 Employment and Pensions applies The exit provisions aim to reflect as far as possible the exit requirements of HM Treasury Guidance A Fair Deal for Staff Pensions Procurement of Bulk Transfer Agreements and Related Issues The Local Authority could consult with its professional advisers regarding these provisions and the Guidance and the requirements it wishes to impose HM Treasury have indicated that the exit provisions in HM Treasury Guidance A Fair Deal for Staff Pensions Procurement of Bulk Transfer Agreements and Related Issues may cover not only Transferring Members but also Pensionable Authority Employees who did not transfer their benefits from the LGPS under the initial bulk transfer but did join the Broadly Comparable Scheme for future service only The Local Authority should consult with its professional advisers regarding the scope of the employees it wishes to protect under this paragraph HM Treasury Guidance A Fair Deal for Staff Pensions Procurement of Bulk Transfer Agreements and Related Issues provides that onward bulk transfer requirements can be imposed on the pension scheme and or the sponsoring employer The Local Authority will need to consider whether it wants to include a shortfall obligation of this type on the Employer Page 78 of 9491 SCOTTISH FUTURES TRUST Form 9 Authority Events of Default for non NHS bodies 39 1 5 39 1 6 an expropriation seq
36. OTTISH FUTURES TRUST Schedule Part Comment standards This should in turn lead to simpler contract monitoring and performance measuring requirements for the Authority Standards have been included to ensure that those aspects of service that have a material ability to influence efficient use of energy in the Facilities are properly measured One matter that may require particular consideration by Authorities is the issue of site based staff for the Facilities such as school janitors Where it is normal to have one or more persons based at the Facilities providing a range of services that includes aspects of the hard FM service such as operating the building management system and providing a first line of reactive maintenance response but also include roles such a opening and closing the Facilities materials handling and laying out flexible spaces such as halls for particular uses which do not form part of the hard FM service there can be compelling arguments both ways on whether such staff should remain employed by the Authority or the school or be transferred to the private sector service provider There are examples of both solutions and also of hybrid arrangements hereby the employee concerned performs roles for both parties Anecdotal evidence is that experience of hybrid arrangements is mixed and depends largely on how well both parties plan and manage the arrangement The Authority needs to recognise that if it retains sit
37. Part 1 Additional Asbestos means Asbestos discovered at a Demolition Site to the extent only that it differs in nature and or extent and or location from the Asbestos Add Additional Asbestos Delay to the list of Delay Events in Clause 29 3 and Compensation Events in Clause 29 10 Page 52 of 9491 Asbestos Asbestos Survey Asbestos Survey Report Asbestos Surveyor Asbestos Works Asbestos Works Period Demolition Site Management Survey SCOTTISH FUTURES TRUST identified in the relevant Management Survey has the meaning given to it in the Control of Asbestos Regulations 2006 means a Refurbishment Demolition Survey as described in Guidance Note HSG264 Asbestos The Survey Guide published by the Health amp Safety Executive means a detailed report prepared by the Asbestos Surveyor on the results of an Asbestos Survey which report shall include the Asbestos Surveyor s detailed recommendations as to the nature and scope of the Asbestos Works required at the relevant Demolition Site means a licensed asbestos surveyor appointed in accordance with Clauses 10 7 and 10 9 means in relation to a Demolition Site the removal and disposal of all Asbestos means in relation to a Demolition Site the period of time programmed for the carrying out of Asbestos Works as identified in of the Schedule means means in relation to a Demolition Site the
38. Standard Project Agreements hub DREMS NPD Model User s Guide Update October 2013 To accompany NPD Agreement Version 2 June 2012 and hub DBFM Agreement Version 2 1 October 2013 SCOTTISH FU URES SCOTTISH FUTURES TRUST Contents Chapter 1 Introduction EE 1 Chapter 2 General COmmmbcinS cacncacicmacmientnentainatamanaindaGneaiaebedhian 5 Chapter 3 NUD CUS EE 7 Chapter 4 NPD ti EE 8 Chapter 5 NHS BOSS sisirain vans tute E E EAEE nia eile 9 Chapter 6 Local later gesteet eegener 10 Chapter dem E e 11 APPENDIX 1 Clause specific comments 12 APPENDIX 2 Alternative Recommended Drafting AA 50 SCOTTISH FUTURES TRUST Chapter 1 Introduction Background The Standard Project Agreements are designed to be used for the design build financing and maintenance of accommodation projects such as individual or grouped schools colleges and community health facilities Authorities procuring other kinds of assets may however find some of the approaches used in these contracts useful if developing versions for their specific purposes The Standard Project Agreements exist in two forms one for hub DBFM projects procured through the hub initiative and one for projects adopting NPD non profit distributing principles There is further comment on the differences between the two forms in Chapter 3 hub projects and Chapter 4 NPD projects The two forms are deliberately as similar as possible to maximise efficiency and m
39. UST Chapter 7 FE Colleges General FE College specific drafting is required in relation to matters such as e Authority rights to assign Clause 57 see Form 10 in Appendix 2 e Authority Events of Default Clause 39 see Form 9 in Appendix 2 FE Colleges may also wish to consider provisions that are relevant to schools projects see Chapter 6 11 SCOTTISH FUTURES TRUST APPENDIX 1 Clause specific comments Comment Recitals to be drafted on a project by project basis The Agreement must contain reference to its exclusion from the Housing Grants Construction and Regeneration Act 1996 Suggested drafting as follows This Agreement is entered into pursuant to a project applying principles similar to the principles of the private finance initiative and is excluded from the Housing Grants Construction and Regeneration Act 1996 by virtue of the Construction Contracts Scotland Exclusion Order 1998 SI 1998 686 The Standard Project Agreements assume that contract signature and financial close will be simultaneous If there are project specific reasons why a condition or event cannot be satisfied until after contract signature the Agreement will need to be amended accordingly In those circumstances any conditions precedent CPs should be limited as far as possible to items of real significance that cannot be satisfied prior to signature This approach is necessary to minimise the risk of a party terminating the Ag
40. V to include a relevant Clause in the contract of employment of the relevant employees 27 18 to 27 21 The requirements in these Clauses may be deleted for non NHS projects and for NHS projects where they are not relevant 28 The drafting has been amended to place obligations on both parties recognising that both parties may keep hazardous materials at the Facilities The Authority should consider who is best placed to maintain the COSHH register for the Facilities 28 4 Where the Authority considers it appropriate a carve out may be provided to cover the case of phased construction and handover for the Site 29 Delay Events give rise to an extension of time for completion of construction Compensation is payable for all Delay Events other than Force Majeure or Relief Events as follows e Authority Changes Schedule Part 16 Change Protocol e Clauses 29 9 to 29 13 21 SCOTTISH FUTURES TRUST Clause Comment e Relevant Change in Law referred to in Clause 32 Changes in Law Delay Events may apply after the original completion date However the Authority should be under no obligation to accept early completion where the SPV has completed prior to the revised completion date 29 3 1 The issue of an Authority Change Notice will not in itself give rise to a Delay Event as the SPV will be obliged to continue to carry out the Project Operations until such time as the Change i
41. ailing such notification Sub hubco Project Co shall be entitled to accept the tenders it had recommended to the Authority Sub hubco Project Co shall procure that a copy of each Asbestos Survey Report issued by the Asbestos Surveyor is submitted to the Authority within 7 Business Days of receipt of the same by the Building Contractor 1 The drafting assumes that the SPV has not appointed an Asbestos Surveyor and Licensed Contractor before financial close On the basis that the Additional Asbestos is an Authority risk the drafting allows for the Authority to select the Asbestos Surveyor and Licensed Contractor with an opportunity for Project Co to make its recommendations Compensation payable to the SPV in relation to the removal of Additional Asbestos will be calculated on the basis of the Licensed Contractor s tender If an Asbestos Surveyor and Licensed Contractor are appointed before financial close the drafting in Clauses 10 6 to 10 9 and 10 11 will need to be revised accordingly and the Licensed Contractor s schedule of rates should be set out in the Schedule to the Project Agreement and used for calculating compensation payable to the SPV under Clauses 10 12 and 10 13 Page 51 of 9491 SCOTTISH FUTURES TRUST 10 11 Following the issue of each Asbestos Survey Report Sub hubco Project Co shall procure that the Licensed Contractor appointed pursuant to Clause 10 9 provides a revised tender clearly setting out its assumptions resou
42. al for Staff Pensions Procurement of Bulk Transfer Agreements and Related Issues published June 2004 the SPV may include in their price a risk premium for Bulk Transfers This will reflect the concern of their actuarial advisors that the Initial Bulk Transfer Terms may not properly reflect the liabilities that the SPV s pension scheme will be required to accept in the event that bulk transfers take place If this happens the parties will need to ensure that the agreement records exactly what assumptions have been made and how any perceived risk has been priced For example the SPV may have assumed that 40 of those eligible exercise their right to transfer accrued entitlement from the NHS Pension Scheme If fewer than that actually transfer the Authority will wish to ensure that any excess risk pricing is removed Conversely if greater numbers exercise their right to transfer the SPV will expect an upwards adjustment In both cases the basis on which adjustments are to be calculated should be made clear and the formula for doing this should be specified 20 SCOTTISH FUTURES TRUST Clause Comment in the SPV s final bid or on a hub project Stage 2 Submission It is important that the assumptions are agreed as soon as possible as experience suggests there is scope for dispute 26 9 Where an Authority is satisfied that it is not practicable for the SPV to procure such an arrangement it is permissible to agree t
43. approval must be supported by clear and robust reasoning as to an Economic pee eet is Gelee oen a _project aapa onions terme of Clause 53 22 Reinstatemen Failure to do so will be a breach of the SP V s_obligations and_the Authority wil have the necessary and appropriate in the context of the relevant project and the interests of the parties involved 53 23 ee ue that as a_result reinstatement _occurs in _accordance_with_Clause 3 22 27 SCOTTISH FUTURES TRUST Clause Comment 53 25 54 1 As a matter of good practice the Authority should review the relevant subcontracts to ensure that they contain mirror provisions excluding the right to claim Indirect Losses 54 3 The Authority should note that the effect of the sole remedy provisions contained in the Standard Project Agreements is that to the extent the Payment Mechanism does not take account of a particular service failure the Authority will not be able to recover any loss or damages from the SPV The SPV s lenders will be unwilling to accept a general right to sue for breach of contract if a service failure is not caught Schedule Part 14 Payment Mechanism and the Service Level Specification developed by the SFT are designed to be as all encompassing as possible but the Authority will need to ensure that this rema
44. ation triggers linked to deductions rather than service failure points e Malicious damage risk is retained by the public sector see Clause 49A Value Added Tax NHS bodies should consider their VAT status in relation to any input tax that they will incur in relation to a project such as on the monthly service payments and utility supplies and the application of section 41 of the VAT Act SCOTTISH FUTURES TRUST Chapter 6 Local authorities General Local authority specific drafting is required in relation to matters such as e The Local Government Contracts Act 1997 see Form 11 in Appendix 2 e Authority rights to assign Clause 57 see Form 10 in Appendix 2 e Authority Events of Default Clause 39 see Form 9 in Appendix 2 e Best Value see Form 12 in Appendix 2 Schools Where the facilities are a school provisions may be relevant to deal with matters such as e Development constraints re adjacent operating school facilities see Form 4 in Appendix 2 e School representative see Form 1 in Appendix 2 e Dates for service commencement see note to Clause 14 4 in Appendix 1 e Use of the facilities additional hours community use third party use see Form 6 in Appendix 2 e Janitors see note to Schedule Part 12 in Appendix 1 Pensions If employees are expected to transfer to a service provider and they are members of the LGPS suitable alternative drafting is provided in Form 8 in Appendix 2 10 SCOTTISH FUTURES TR
45. ayment mechanism should be structured so that payment of a relevant percentage of the unitary charge commences on practical completion with build up of the payment being linked to completion of each phase of post completion service commissioning if any so that an increase in payments is triggered by completion of each phase until full payment is reached The basic principle is that the Authority only pays for what it in fact receives 34 2 The drafting here and in Section 2 of Schedule Part 14 Payment Mechanism assumes that the Authority will pay for services delivered in the current Contract Month at the end of the current Contract Month In order to allow sufficient time for reporting and agreeing performance and any resulting Deductions monitoring and reporting will work two months behind Thus payment for month 3 will be invoiced near the beginning of month 3 and paid before the last working day of month 3 and will be based on service performance in month 1 Month 2 will be spent reporting and agreeing that performance This is considered to be the optimum timing for value for money consistent with the principle that payment should not be made before services have been delivered An Authority proposing any alternative payment cycle will have to demonstrate to SFT the value for money benefit 34 3 SPV to specify the manner of payment 36 Hub This Clause contains the equity return sharing and capping drafting provisio
46. be specified but this may have cost value for money implications 62 4 The Authority should ensure that the appropriate policy is in place 62 7 It is up to the parties to decide whether costs associated with any future change in the Authority s FOI S A cost recovery policy should go through Schedule Part 16 Change Protocol If the Environmental Information Scotland Regulations are relevant to the project the parties may include broadly equivalent provisions in the Agreement dealing with costs and based upon the Authority s policy towards reimbursement of such costs under section 8 of the Environmental Information Scotland Regulations 64 1 amp 64 2 The Authority may wish to consider on a project specific basis whether there are certain notices that should only be capable of being validly served by first class post or hand delivery 70 Where the SPV is leasing the Facilities to the Authority the drafting will require to be extended to cover any conflicts between this Agreement and such a lease 74 Where the Authority is a local authority the Clause in Form 11 of Appendix 2 containing the consent to certification of the Project Agreement and incorporation of relevant discharge terms in Schedule Part 27 should be included 75 Where the Authority is a local authority the Clause in Form 12 of Appendix 2 containing obligations in relation to the local authority s best value duties should be
47. before the Relevant Service Transfer Date or Cessation Date as the case may be Such benefits shall continue to be provided until death in service benefits are provided by the Broadly Comparable Scheme Subsequent Transfers Where during the term of this Agreement the employment of any Pensionable Authority Employee is transferred on a second and or subsequent occasion as a result of a change of service provider Sub hubco Project Co shall procure that each Pensionable Authority Employee who is a member of or eligible for membership of the outgoing employer s pension Page 69 of 9491 Pension 26 17 SCOTTISH FUTURES TRUST scheme shall be offered membership of a pension scheme operated by the new employer which as a minimum 26 16 1 for future service offers the benefits which enabled the outgoing employer s pension scheme to be certified as being broadly comparable in accordance with the provisions of Clause 26 11 Membership of Broadly Comparable Scheme for Pensionable Authority Employees and 26 16 2 must be able to accept bulk transfers from the outgoing employer s pension scheme where the pension schemes are different in respect of benefits which the Pensionable Authority Employee had accrued or been credited in the outgoing employer s pension scheme and Sub hubco Project Co shall and shall procure that any relevant Service Provider shall consult with and inform those employees of the pension provisions relating to
48. cluded to enable the parties at their discretion to consider early occupation by the Authority of the Facilities The consequential amendments required as a result of agreeing to early completion e g in relation to commissioning phasing equipment procurement service payments would have to be considered and agreed on a project specific basis at the time If the Authority is not willing to accept early completion of the Facilities under any circumstances this Clause may be deleted 15 1 The standard form Independent Tester Contract is set out at Schedule Part 13 and provides that the Independent Tester will be appointed jointly by the parties 15 SCOTTISH FUTURES TRUST Clause Comment 16 Any provisions relating to equipment to be drafted on a project specific basis including tailoring of the Service Level Specification 17 The Standard Project Agreements assume that the Authority and the SPV will each undertake inspection and commissioning activities both prior to and after completion Parties need to consider which commissioning activities have to occur before and which after completion and in each case by whom on a project specific basis The Standard Project Agreements envisage that the Final Commissioning Programme will set out all requirements and obligations in relation to the development nature principles and performance of the completion tests to be performed to enable certification
49. ctionality 12 6 3 On hub Projects where there is more than one Relevant Participant the Participants may require that representatives of each have similar rights as referred to in here and in Clause 12 6 4 13 1 1 On hub Projects where there is more than one Relevant Participant the Participants may require that representatives of each have similar rights as referred to in this Clause 13 1 Access to Site 14 3 Where the Works are being carried out on an operational site the Authority may wish to consider restrictions on the types of works that the SPV will be entitled to carry out during certain key dates e g during exam periods Where such restrictions are imposed the Authority will need to ensure that it has the opportunity to comment object under the Review Procedure where proposed changes to the Programme will impact on these key dates See Form 4 in Appendix 2 for optional drafting that affords the Authority a remedy where construction works cause disruption to the provision of Authority Services Community Services at existing facilities 14 5 If the Authority wishes to place additional constraints on when service commencement may occur for example only during school holidays this Clause should be amended as required Authorities should remember that the more restrictive its requirements the greater the risk that will be priced by bidders 14 6 Provision for notification of early completion has been in
50. d 25 SCOTTISH FUTURES TRUST Clause Comment remain a private sector risk the private sector should not be penalised for the consequences of a Service Event where the Authority s Representative has agreed that a Service Event was caused by malicious damage other than by a private sector related party and the Authority has not instructed Rectification An Excusing Cause to this effect has therefore been added to Clause 51 and the private sector s right to go ahead and Rectify now only need apply where failure to do so will increase the costs of delivering the Services see Clause 49A 3 3 51 The list of Excusing Causes needs to be considered on a project specific basis 51 2 On projects which include phased working it is possible that Delay Events affecting construction work may also have an impact on service delivery For this reason it may be necessary to include additional Excusing Causes on a project specific basis although Authorities should take care not to do so automatically for example Relief Events do not give relief from deductions for service failure in any circumstances even though they are classified as Delay Events 51 2 2 Include limb e in phased projects otherwise delete 51 2 3 Include where the Authority or other Community Services Provider is a health board and there are clinical services being provided at the Facilities Other Authorities may wish to conside
51. d in good faith during the bidding process or the New Project Approval Process on a hub project as the case may be but were not instructed by the Authority or permitted by the to be carried out that these should be specifically carved out of Clause 10 3 The risk that an Authority assumes in terms of Clauses 10 3 and 10 4 where relevant i e where there are areas of the Site under existing buildings that are not capable of survey will include the risk of asbestos The risk of asbestos on other areas of the Site should be considered on a project specific basis The Standard Project Agreements assume and it will ordinarily be expected that the SPV takes this risk including on projects that involve the demolition of existing buildings where the SPV ought to be in a position on the basis of its knowledge and expertise to evaluate the need for asbestos removal and factor this in to its demolition proposals In exceptional cases e g on refurbishment projects where the treatment of asbestos will be a particularly sensitive issue it may be appropriate for an Authority to consider risk sharing that involves a process for carrying out asbestos surveys and the SPV pricing asbestos works on the basis of those surveys If the Authority considers that risk sharing will offer an appropriate and value for money solution it should use the drafting in Form 2 in Appendix 2 11 1 1 Where on a project specific basis there are certain Consents which onl
52. dance with the Law at the date of expiry or termination as the case may be and this Clause is without prejudice to such determination Sub hubco Project Co shall not and shall procure that no Service Provider shall make any material change to the terms and conditions of employment of any person employed in the provision of any Service transfer any person employed in the provision of any Service to another part of its business or materially increase or decrease the number of such persons 25 8 1 within the period of twelve months immediately preceding the expiry of this Agreement or 25 8 2 within the period of twelve months before the termination of this Agreement or if shorter during the period of notice of termination without the Authority s consent which shall not be unreasonably withheld except if such change is required by Law If the Transfer Regulations do not apply on the expiry or earlier termination of this Agreement the Authority shall ensure that each new provider of a service equivalent to a Service on or after the expiry or earlier termination of this Agreement including the Authority shall offer employment to the persons employed by Sub hubco Project Co or a Service Provider in the provision of the Service immediately before the expiry or earlier termination of this Agreement and shall indemnify Sub hubco Project Co or a Service Provider for Direct Losses any of them may suffer or incur as a result of its failure to d
53. day 1 levels and for indexation of the service payments in the Payment Mechanism Authorities will wish to consider and seek advice on the appropriateness of other indices including potentially a basket of indices as alternatives to RPI It is not essential that the same index is used for the purpose of index linked in Schedule Part 1 and indexing the service payment in Schedule Part 14 Payment Mechanism Completion Documents Section 1 Because the premiums for the Operational Insurances are a pass through cost the Authority will need an estimate of the likely costs of the first year Operational Term policies for its final business case Provision has been made for the SPV to provide that estimate at Financial Close Key Works Personnel Include details required in accordance with Clause 8 9 Funders Direct Agreement The purpose of the Funders Direct Agreement is to provide rights for the Funders to step in and manage the project where otherwise the right and obligation of the SPV to perform the project would terminate The Funders require this right because their preferred approach will generally be to keep the project alive and preserve the project s income stream rather than allowing the Agreement to terminate as this represents the Funders best chance of being fully repaid The Funders Direct Agreement sets out arrangements whereby the effect of any notice of termination issued by the Authority will be
54. e staff who currently perform reactive maintenance which will become the responsibility of the private sector there may be implications for response times and or costs of service compared with what might be agreed if those site staff were available to the private sector service provider SFT does not consider that there is a right solution for all circumstances and recommends that the Authority approach this on a case by case basis The Performance and Availability Standards provide for Response Times The aim is to ensure that irrespective of the Rectification Period the Authority is told what steps will be taken to rectify the service event and when In addition if the nature of the event is such that there are health and safety or security implications the Service Provider must attend the Facilities and make them safe The specific requirements in terms of response are project specific according to the nature and location of the Facilities and what it is reasonable and cost effective to require the Service Provider to achieve 12 Section 2 The Method Statements will be project specific The Authority should ensure that the Method Statements capture all the service provision descriptions that were included in the preferred bidder s bid and which formed part of the offer that was evaluated in reaching the decision to select the preferred bidder 12 Section 3 The Services Quality Plan will be project specific and developed dur
55. e NPD version Initial Funding Agreements List those Funding Agreements put in place at Financial Close Liquid Market Unless agreed by the parties a novation to a vehicle controlled by the Senior Funders under the Funders Direct Agreement should not on its own be sufficient to constitute a Liquid Market NPD Mandatory Provisions Cross refer to the Mandatory NPD Articles of Association NPD Requirements The NPD Requirements reflect the fundamental principles of the NPD model Note that the restriction on payments to shareholders does not extend to the SPV s share of any Refinancing Gain or savings generated by an SPV Change which are payable directly to the investors and not caught by the Surplus payment provisions and it is envisaged that these payments will made under the terms of the Subordinated Funding Agreements Failure by the SPV to comply with the NPD Requirements may lead to termination of the Project Agreement Termination in this scenario will give rise to compensation equivalent to that paid in the event of termination for breach of the refinancing or corrupt gifts provisions Original Senior Commitment Adjust for a bond transaction to refer to a the gross bond proceeds to be raised and b the amount committed under the Senior Funding Agreements other than 32 SCOTTISH FUTURES TRUST Schedule Comment Part such bond proceeds in each case as at Financia
56. e of service transfer 25 14 1 If there are too few transferring employees to establish the SPV s projected workforce at the time of service transfer this does not reduce the SPV s staff costs because additional staff will have to be recruited to fill the gaps If there is re profiling before Transfer at the request of the SPV or if other changes have been included in pricing assumptions then this Clause should be amended to reflect costing assumptions If final bids were or on a hub project a Stage 2 Submission was invited on the basis that the Authority will assume costs of redundancy this Clause will need to be developed to reflect the correct basis 25 14 4 The SPV may have made binding contractual commitments having relied in good 19 SCOTTISH FUTURES TRUST Clause Comment faith on information provided by the Authority 25 20 If there are existing private sector providers of services to the Authority the contracts with those providers should be examined to establish if a similar obligation exists in favour of the Authority If so the Authority should consider if better value for money would be obtained if this Clause 25 20 and Clause 25 21 were to extend to all Transferring Employees 25 23 See note on Clause 25 20 regarding the need to review existing contracts 25 29 The Authority should ensure relevant policies are identified to the SPV at an early stage in the biddi
57. ect agreement should be included here Authorities should also seek advice from technical advisors on design review construction monitoring and tests on completion to give a high degree of assurance that the design requirements have been achieved before the services commence These are all matters that Authorities also require to address for capital funded assets and a generally similar approach should be adopted Section 4 This section will usually include the following e Introduction e Architectural proposals e Civil Structural engineering proposals e Mechanical and Electrical engineering proposals 35 SCOTTISH FUTURES TRUST Schedule Comment Part e Thermal and energy efficiency proposals e Construction Methodology e Drawings full design to be developed at least to 1 200 level with a sample drawing of each key area of the Facility developed to 1 50 level e Management proposals 6 Section 5 This section should include the design that is to be developed in accordance with principles set out in the Review Procedure e g 1 200 drawings of site plans 1 50 drawings of room layouts etc 6 Section 6 This section should include a room by room design and contents schedule 6 Section 7 This section should provisions relating to the monitoring through design and construction and testing on completion of the Authority s thermal and energy efficiency requirements 6 Section 8 This section
58. ect to the Authority giving Sub hubco Project Co reasonable prior notice having regard to the nature and extent of the use required the Authority may require that 22 13 1 any Functional Area be used by the Authority or for Community Use outside Core Times or 22 13 2 any Functional Area in excess of the Functional Areas detailed in the definition of Core Times be used by the Authority or for Community Use during Core Times Page 60 of 9491 SCOTTISH FUTURES TRUST The Authority must reimburse Sub hubco Project Co for any additional costs and expenses including overhead administration costs and profit incurred by Sub hubco Project Co and any Service Provider which all taken together must not exceed e of the direct costs of providing the Services reasonably properly and demonstrably incurred by Sub hubco Project Co as a result of the use by the Authority or the Community Use of that Functional Area the additional use of which has been requested by the Authority in terms of this Clause 22 13 Where this drafting is used the following definitions should be added to Schedule Part 1 Academic Year means the period from the first day of the Authority s school year until the last day of the Authority s school year excluding holiday periods as published from time to time prior to the commencement of each Academic Year such year to be divided into three terms each containing a half term holiday and in any event
59. ed on the basis of the Authority s written policy in relation to such benefits at the time of the Relevant Service Transfer Date which the Authority shall provide upon request Where the payment of such benefits is not for whatever reason possible Sub hubco Project Co shall and or shall procure that any relevant Service Provider shall compensate the Pensionable Authority Employees in a manner which is broadly comparable or equivalent in cash terms Where this alternative Clause 26 drafting is used the following definitions should be added to Schedule Part 1 Actual Contribution Amount means the contribution set out in a rates and adjustments certificate issued to Sub hubco Project Co and or any relevant Service Provider pursuant to either Regulation 32 or 34 of the LGPS Administration Regulations Additional Costs means an increase in any liability to contribute to the LGPS imposed on Project Co or any relevant Service Provider as a consequence of a the exercise by Sub hubco Project CoJof any discretion under the LGPS Regulations to permit any of the Pensionable Authority Employees to retire before such Pensionable Authority Employees normal pension age as defined in regulation 16 of the LGPS Administration Regulations b any augmentation of benefits under the LGPS for any of the Eligible Employees c any redundancy of any of the Pensionable Authority Employees which gives such employee the right
60. eement or the Base Senior Debt Termination Amount or the Revised Senior Debt Termination Amount as relevant element of the Termination Sum in full on any Instalment Date If the Authority 1 4 1 fails to make a payment Sub hubco Project Co in accordance with paragraphs 1 1 or 1 2 or 1 3 above or 1 4 2 breaches Clause 57 4 Sub hubco Project Co may issue a notice to the Authority declaring any unpaid and outstanding element of as applicable the Adjusted Estimated Fair Value of the Agreement or the Base Senior Debt Termination Amount or the Revised Senior Debt Termination Amount as relevant element of the Termination Sum and any accrued but unpaid interest to be immediately due and payable To the extent that the Adjusted Estimated Fair Value of the Agreement is less than zero then an amount equal to the Adjusted Estimated Fair Value of the Agreement shall be due and payable by Sub hubco Project Co to the Authority on the Compensation Date Following Retendering 1 6 Subject to paragraphs 1 8 and 1 10 following a retendering exercise under Section 2 Compensation for Sub hubco Project Co Default of this Schedule Part 17 the Authority shall pay to Sub hubco Project Co an amount equal to the Adjusted Highest Compliant Tender Price no later than the date falling twenty 20 Business Days after the later of 1 6 1 the date of the New Agreement and 1 6 2 if Sub hubco Project Co has referred a dispute relating to the Adj
61. eements that would alter these The term Funding Default should be defined by reference to the borrower defaults under the Senior Funding Agreements and applies whether or not the Senior Funders choose to accelerate their loan Please note that this obligation is additional to the obligation of the Agent under paragraph 9 4 of Schedule Part 4 Funders Direct Agreement Clause Recitals 2 4 1 4 3 1 4 4 NPD version 4 7 48 in NPD version 48 49 in NPD version The Authority should insert a definition of Interim Project Report that sets out the broad headings and issues which it requires to cover The Interim Project Report ought to include any information that the SPV is required to provide to the Senior 12 SCOTTISH FUTURES TRUST Clause Comment Funders under the Senior Funding Agreements in these circumstances 5 2 4 Reference to NHS Requirements is applicable where the Authority or a Community Services Provider is a health board Other Authorities to consider additional requirements they may have on a project specific basis 5 3 1 Reference to NHS Requirements is applicable where the Authority or a Community Services Provider is a health board Other Authorities to consider additional requirements they may have on a project specific basis 5 4 to 5 5 Consider what joint working arrangements are necessary to provide a practical approach to interface with the soft s
62. ejected and in respect of which any rights of appeal have expired been rejected or otherwise lost or b the withdrawal of that Planning Challenge Page 56 of 9491 SCOTTISH FUTURES TRUST Form 4 Unavailability of Existing Facilities 13 7 Unavailability of Existing Facilities If any area of the Existing Facilities in the reasonable opinion of the Authority cannot continue to be used for the provision of the Authority Community Services prior to the Actual Completion Date Phase Actual Completion Date through a failure by Sub hubco Project Co to carry out the Works in accordance with Clause 12 The Design Construction and Commissioning Process and Clause 14 Programme then at the option of the Authority Sub hubco Project Co shall either 13 7 1 reimburse to the Authority the proper costs reasonably incurred by the Authority in providing alternative accommodation and associated arrangements or 13 7 2 provide at Sub hubco s Project Co s expense equivalent alternative accommodation in a location with the town boundaries of where the Existing Facilities are situated and provide such additional or alternative ancillary services as may be required to enable that accommodation to be used for the provision of the Authority Community Services Page 57 of 9491 SCOTTISH FUTURES TRUST Form 5 Community Benefits COMMUNITY BENEFITS 1 Project Co shall comply with the Authority s Community Benefits Requi
63. entive on the part of the Authority to default Paragraph 1 2 3 hub projects only The SPV should be required to state its preferred method of calculation of equity return in its bid for NPD projects this will have been agreed in the Territory Partnering Agreement It should choose between the level set out in the original base case the market value at the time of termination and the original base case return from the Termination Date Paragraph 1 2 3 NPD projects only This assumes that the SPV share capital and subordinated debt are stapled Paragraph 2 In addition to a general right to terminate at any time the Authority may consider it would be beneficial to have the option to terminate the Agreement on specified dates Authority Break Point Dates for a specified compensation amount for equity and Subordinated or Debt Any Authority wishing to include this drafting must 43 SCOTTISH FUTURES TRUST Schedule Comment Part consult the SFT 17 Section 2 Paragraph 2 1 2 Unless agreed by the parties a novation to a vehicle controlled by the Senior Funders under the Funders Direct Agreement should not on its own be sufficient to constitute a Liquid Market Paragraph 3 8 Negative Post Termination Service Amounts will always be taken into account in reducing the Adjusted Highest Compliant Tender Price irrespective of whether or not they have been set off against Positive Termination Service Amount The
64. ents for Authorities SFT s approach has been e to promote maximum value for money through commercially reasonable risk transfer consistent with the principles outlined above e to adhere to the hub DBFM structure and NPD principles approved by Scottish Ministers e tosimplify the documents as far as possible consistent with a robust commercial structure and financeability e to minimise transaction costs with a standard that should be reasonably acceptable by contractors investors and funders as well as procuring authorities SCOTTISH FUTURES TRUST Key Changes Compared with the original Scottish Standard Health PPP Contract some additional clauses and amendments to standard clauses have been included and some deletions have been made to reflect changing circumstances the different types of procuring authorities more straightforward facilities as compared with acute healthcare and simplified risk transfer in the light of changing accountancy treatment These include A narrowly defined scope of hard FM service Schedule Part 12 The payment mechanism has been developed using concepts from both the NHS and schools sectors Schedule Part 14 and provide a standard approach for accommodation projects across sectors although it is recognised that may need to be developed further for acute health projects and in this regard NHS bodies must liaise with SFT Equity return sharing and capping for hub DBFM projects and a mecha
65. er detail on the NPD model is contained in the NPD Explanatory Note available from the SFT SCOTTISH FUTURES TRUST Chapter 5 NHS Bodies Being based on a previous Scottish Standard Health PPP Contract use of the Standard Project Agreements by NHS bodies might be expected to require the least adaptation However because the Standard Project Agreements have been developed in anticipation of a pipeline of mostly non acute healthcare projects modifications have been made to bring the general approach somewhat into line with arrangements previously used for local authority accommodation particularly schools projects Where the facilities deliver acute healthcare and require to operate on a 24 7 basis it may be appropriate to revert to some of the measures in the Scottish Standard Health PPP Contract in particular the measurement of service performance by sessions rather than days and the commissioning arrangements around handover of the new facilities and in this regard NHS bodies must liaise and agree an approach with SFT Key changes In addition to the general changes in scope of services and risk transfer positions mentioned in Chapter 1 aspects of the Standard Project Agreements that are different from the former NHS standard document that NHS bodies will wish to note in particular are e Performance measurement by days rather than sessions e No pre completion and post completion commissioning e Warning notice mechanism and termin
66. ervice provider which may be the Authority itself 5 5 Applicable where the Authority or a Community Service Provider is a health board The NHS and You replaces Patient Rights and Responsibilities This provision is intended to capture customer service aspects of healthcare provision and is not intended to capture e g the NHS Plan Other Authorities may wish to consider using a corresponding provision or expanding this provision on a project specific basis 6 1 This Standard Project Agreements do not envisage that third party revenue generation activities will form part of the Project This Clause and the Agreement generally will need to be amended as appropriate to provide for any other activities to be carried out as part of the Project e g additional income generation activities to be conducted on Site Where the Facilities are a school suitable drafting to provide for a school representative is in Form 1 in Appendix 2 The Standard Project Agreements are drafted on the basis that the Site has been selected by the Authority If the Site is to be selected by the SPV then these provisions will need to be reviewed and amended as appropriate The Authority retains_undisclosed title risk Under Clause 9 the Authority grants licences that are subject to the Reserved Rights and only those title matters that are included within the definition of Title Conditions The private sector parties are required to comply only w
67. ether under contract delict restitution or otherwise save for 2 2 1 any antecedent liability of the Authority which arose prior to the Termination Date but not from the termination itself to the extent such liability has not already been taken into account in determining the Adjusted Highest Compliant Tender Price or the Adjusted Estimated Fair Value of the Agreement as the case may be and 2 2 2 any liabilities arising in respect of any breach by either party of their obligations under Clause 47 6 of the Agreement which continues after the Termination Date The costs and or expenses to be taken into account in the calculation of all termination sums due pursuant to this Schedule Part 17 Compensation on Termination shall only be such costs and or expenses to the extent that they are reasonable and proper in quantum and shall have been or will be reasonably and properly incurred and shall only be counted once 4 Undisputed Amounts If the calculation of any termination amount is disputed then any undisputed element of that amount shall be paid in accordance with this Section 5 General of this Schedule Part 17 Compensation on Termination and the disputed element shall be dealt with in accordance with Schedule Part 20 Dispute Resolution Procedure 5 Outstanding Senior Debt Amount 5 1 5 2 The Authority shall be entitled to rely on the certificate of the Senior Funders Agent as conclusive as to the amount of the Base Seni
68. f Pensionable Authority Employees pay as defined in regulation 5 of the Local Government Pension Scheme Benefits Membership and Contributions Scotland Regulations 2008 means means an admission agreement entered into in accordance with regulation 5 of the LGPS Administration Regulations by the Administering Authority and Project Co or any relevant Service Provider as appropriate and a template for which is set out at Schedule Part Admission Agreement means a transferee admission body for the purposes of regulation 5 of the LGPS Administration Regulations means the pension scheme or schemes nominated by Sub hubco Project Co or any relevant Service Provider in accordance with paragraph Clause 26 11 Membership of a Broadly Comparable Scheme for Page 72 of 9491 Fixed Amount LGPS LGPS Administration Regulations LGPS Compensation Regulations LGPS Regulations Pensionable Authority Employee SCOTTISH FUTURES TRUST Pensionable Authority Employees means of Pensionable Authority Employees pay as defined in regulation 5 of the Local Government Pension Scheme Benefits Membership and Contributions Scotland Regulations 2008 adjusted in accordance with the Adjustment Factor plus any Additional Costs means the Local Government Pension Scheme Scotland established pursuant to regulations made in exercise of powers under sections 7 and 12 and Schedule 3 of the Superan
69. ffered by the Authority which arise under Clause 26 2 4 Admission Agreement 26 3 The Authority shall before the Relevant Service Transfer Date execute each of the Admission Agreements referred to in Clause 26 1 Sub hubco Project Co to become an Admission Page 65 of 9491 SCOTTISH FUTURES TRUST Body and shall use reasonable endeavours to ensure that the Administering Authority executes each such Admission Agreement before the Relevant Service Transfer Date Indemnity for a breach of the Admission Agreement 26 4 Sub hubco Project Co hereby indemnifies the Authority and or any future Service Provider and in each case their sub contractors on demand from and against all Direct Losses suffered or incurred by it or them which arise from any breach by Sub hubco Project Co or any relevant Service Provider of the terms of the Admission Agreement to the extent that such liability arises before or as a result of the termination howsoever caused Suspension or expiry of this Agreement Indemnity or bond 26 5 Sub hubco Project Co shall procure that it and any relevant Service Provider shall as soon as reasonably practicable obtain the indemnity or bond required in accordance with the Admission Agreement Right of Set Off 26 6 The Authority shall have a right to set off against any payments due to Sub hubco Project Co under this Agreement an amount equal to any overdue employer and employee contributions and other pa
70. hat the SPV will procure provision of alternative pensions for new joiners 27 1 The Standard Project Agreements assume that the Project is a stand alone development and not part of a larger site and therefore the Authority s rights here apply in relation to the Facilities only Authorities should refer to any other relevant areas e g existing premises from which the Authority operates as necessary on a project specific basis 27 5 The Standard Project Agreements assume that Authority Policies will include any relevant rules regulations and requirements of the Authority relating to the conduct of staff including those in respect of security arrangements 27 9 This Clause is only applicable where staff transfers are envisaged 27 10 to 27 12 The Authority should consider and review Clauses 27 10 to 27 12 in light of its own policies in relation to disclosure checks and disclosure of convictions and the extent to which these obligations apply during the construction and or operational periods The Authority s requirements in this regard should correspond to the relevant sector and the extent to which the SPV s staff are likely to be in contact with children the elderly or vulnerable persons 27 14 Authorities should note that the procedures in Clause 27 14 will be governed by Data Protection law To the extent that the Authority envisages receiving information concerning the SPV employees the Agreement will need to oblige the SP
71. he Change Protocol developed for the BSF programme in England The SFT intends to use experience from projects to produce a standard catalogue for Low Value Changes that it will provide as supplementary guidance in due course The Change Protocol includes an option that allows the Authority to carry our certain very minor classes of changes for itself o Additional drafting is provided in Appendix 2 of this Guide to deal with issues that are commonly encountered on individual projects such as planning challenge or unforeseeable asbestos and should be used where these are relevant to particular projects Appendix 2 also contains alternative drafting to deal with sector and or Authority specific matters SFT Contact Should you have any questions on a standard Project Agreement please contact the SFT team assisting with your specific project http www scottishfuturestrust org uk SCOTTISH FUTURES TRUST Chapter 2 General Comments Using the Standard Project Agreements Use of the Standard Project Agreements is not a substitute for project specific advice and Authorities must take appropriate legal financial and technical advice when using them Neither this Guide nor the footnotes in the Standard Project Agreements represent an exhaustive list of project specific matters that need to be considered by each Authority and its advisors who must select the appropriate Standard Project Agreement and thereafter analyse and review it in detail to
72. he Transferring Staff or any of them or their respective representatives and shall use all reasonable endeavours to mitigate the amount of any costs payable in respect of the Transferring Staff or their dismissal The Authority shall indemnify Sub hubco Project Co against any costs referred to in Clause 25 2 3 reasonably incurred by Sub hubco Project Co or by a relevant Service Provider and for which Sub hubco Project Co is responsible and shall reimburse any costs reasonably and properly incurred by Sub hubco Project Co or the Service Provider in employing any Transferring Staff prior to the expiry of the period referred to in Clause 25 2 2 P Applicable where the Authority is a local authority j Applicable where the Authority is a local authority Time period to be agreed on a project by project basis Page 62 of 9491 SCOTTISH FUTURES TRUST Compliance with Legislation and Authority Policies 25 3 Sub hubco Project Co shall comply and shall procure that each Service Provider and all persons employed or engaged by a Service Provider in connection with the provision of any Service shall comply at all times with the Law on health and safety at work and on anti discrimination and equal opportunities 25 4 Sub hubco Project Co shall procure that each Service Provider takes all reasonable steps to procure that all persons including any employed or engaged by a Service Provider in connection with the provision of any Service
73. hes More extensive service requirements are not precluded where they can be shown to demonstrate value for money but the general expectation is that the Authority will arrange for the provision of these at revenue funded facilities on the same basis as it uses for their existing and capital funded facilities Consideration will need to be given to practical interface with the Authority and any other soft service providers at the Facilities e g in relation to access arrangements The Authority will need to consider carefully the interface between the design and specification of the Facilities and the risks that the Authority is retaining in relation to the Facilities e g utilities consumption security internal redecoration in the same way that it would need to on a capitally funded project Note that the basic helpdesk service is restricted to dealing with Services related events If an Authority wishes a more broadly based helpdesk that handles a broader scope of service requests it should consider carefully whether this is best provided under the project or separately In the latter case the broad based helpdesk must be one of the parties able to make reports to the project helpdesk The overall number of service standards has been reduced It is considered that these had tended to become over elaborate and detailed and that the requisite levels of service can be incentivised using a smaller number of carefully targeted 38 SC
74. ide the quarterly annual information in accordance with then on the occurrence of each such failure Project Co shall pay to the Authority the sum of insert amount indexed Page 58 of 9491 SCOTTISH FUTURES TRUST provided that in each case the Authority has first served notice on Project Co notifying it of its non compliance and Project Co has failed to rectify such non compliance within twenty Business Days of such notice 5 The Authority s sole and exclusive remedy in respect of a breach of Clause 4 shall be the payments provided for in Clause 4 and Project Co s maximum liability in this respect shall be insert amount indexed 6 All payments due by Project Co to the Authority under this Clause shall be payable within Business Days of written demand Where this drafting is used the following definitions should be added to Schedule Part 1 Authority s Community Benefits means those requirements set out in Requirements Project Co s Community Benefits means those method statements set out in Method Statements Page 59 of 9491 SCOTTISH FUTURES TRUST Form 6 Use of the Facilities Priority 22 7 22 8 22 9 The Facilities must be made available for use in the following order of priority 22 7 1 the provision by the Authority of Authority Community Services during the School Day and 22 7 2 Community Use Subject to Clauses 22 9 and 22 12 the Authority i
75. ies agree that 26 2 1 26 2 2 26 2 3 26 2 4 26 2 5 26 2 6 26 2 7 Sub hubco Project Co and or any relevant Service Provider shall not be responsible for any underfunding in the LGPS which relates to and is calculated by reference to service of any Pensionable Authority Employee prior to a Relevant Service Transfer Date subject to the provisions of Clause 26 2 3 and Clause 26 2 4 below Sub hubco Project Co and or any relevant Service Provider shall pay to the Administering Authority for the credit of the LGPS the Actual Contribution Amount in the event that the Actual Contribution Amount is greater than the Fixed Amount liability for the Actual Contribution Amount shall be apportioned as follows a Sub hubco Project Co and or any relevant Service Provider shall be liable for the Fixed Amount and b the Authority shall be liable for the difference between the Actual Contribution Amount and the Fixed Amount in the event that the Actual Contribution Amount is less than the Fixed Amount Sub hubco Project Co shall pay to the Authority the difference between the Fixed Amount and the Actual Contribution Amount the Authority shall indemnify Sub hubco Project Co and or any relevant Service Provider from and against any costs charges and losses suffered by it or them which arise under Clause 26 2 3 b and Project Co shall indemnify the Authority from and against any costs charges and losses su
76. in the amounts that Sub hubco Project Co would have been required to pay principal to the Senior Funders under the terms of the Credit Agreement had the Termination Date not occurred and ii in respect of the sum if any remaining after deducting the Outstanding Principal from the Base Senior Debt Termination Amount or the Revised Senior Debt Termination Amount or the Adjusted Estimated Fair Value of the Agreement as relevant in equal instalments on the Instalment Dates Page 84 of 9491 1 3 1 4 1 5 SCOTTISH FUTURES TRUST b where the Base Senior Debt Termination Amount or the Revised Senior Debt Termination Amount or the Adjusted Estimated Fair Value of the Agreement as relevant is less than the Outstanding Principal on the Instalment Dates pro rata to the amounts that Sub hubco Project Co would have been required to pay to the Senior Funders on each Instalment Date under the terms of the Credit Agreement had the Termination Date not occurred or 1 2 2 as the parties may otherwise agree From the Notice Date until the date of payment interest shall accrue on any unpaid element of the Termination Sum at the No Default Interest Rate and be payable on the next occurring Instalment Date If the Authority has elected to pay in accordance with paragraph 1 2 above it may on 28 days prior written notice to Sub hubco Project Co elect to pay the outstanding part of the Adjusted Estimated Fair Value of the Agr
77. include a list of the equipment that the SPV is required to procure and install and any other items that are relevant to equipment on a project specific basis 12 Service Requirements 37 SCOTTISH FUTURES TRUST Schedule Comment Part 12 This comprises three sections e the Authority s Service Level Specification setting out its service requirements which will have formed part of the tender documentation or in the case of a hub project New Project Request e the Method Statements being the SPV s statement of the methods it will use to satisfy those requirements which will have been bid or in the case of a hub project developed from the relevant Stage 2 Submission and e the Services Quality Plan Authorities should refer to the SFT s template Service Level Specification in preparing their Service Level Specification and requirements for development of Method Statements at an early stage of the procurement process or in the case of a hub project New Project Approval Process 12 Section 1 The Service Level Specification is a basic template for the minimum level of Services Service aspects that have previously often been regarded as part of hard FM services that have been excluded are e Window cleaning e Internal decoration which may also include cleaning and replacement of carpets and other floor coverings e Maintenance of soft landscaped areas e Cutting and marking of natural sports pitc
78. included 76 Investment in NPD and hub DBFM projects presents an opportunity to deliver benefits for local communities and ultimately the Scottish economy Authorities are encouraged to consider on a project specific basis the wider benefits that could flow from their projects such as for example training and recruitment opportunities and supply chain opportunities for SMEs As well as referring to any internal community benefits policies that they may have 29 SCOTTISH FUTURES TRUST Clause Comment Authorities should refer to appropriate guidance e g ConstructionSkills guidance Community benefits are already a key focus in the hub partnerships embedded in the hub contract structure through KPIs in the Territory Partnering Agreement On hub projects the parties will need to agree how the community benefits contracted for in the TPA will be delivered through each individual project For stand alone NPD projects Authorities will need to consider whether and how to incorporate the private sector s proposals for delivery of community benefits into the Project Agreement A suggested form of drafting is set out at Form 5 of Appendix 2 although Authorities must determine the extent to which this drafting is appropriate relevant in the context of their specific requirements It will be important to ensure that the Project Agreement clearly defines the requirements and clearly identifies the method of mon
79. ing or out of documents produced by the preferred bidder during the bidding process 14 Payment Mechanism 14 This is an amalgam of the NHS payment mechanism and some aspects of the SSSC payment mechanism and will require to be tailored to each specific project including to take account of phased completion where applicable It includes the 39 SCOTTISH FUTURES TRUST Schedule Comment Part following principal features e It operates Deductions on the basis of whole days rather than several sessions within a day This can be adapted to suit the circumstances e There are minimum Deductions for Performance Failures and for Availability Failures e Whole Facility unavailability remains an option for Facilities where loss of key areas or more than a specific percentage of the areas in the facility renders the whole of the Facilities unusable by the Authority The relevant criteria will be project specific e The concept of Unavailable but Used is retained where the Authority elects to continue to occupy areas despite them not meeting the Availability Standards and the Deduction will be at 50 of the rate for Unavailability e Deductions for Performance Failures are fixed monetary amounts at one of three levels according to the severity of the failure e Repeated failures will incur increased Deductions e Reporting failures incur Deductions in addition to any Deduction for the original failure e Ope
80. inimise costs in procurement for public and private sector users of the documents and to facilitate joined up contract management across sectors in the future The bulk of the clauses have been taken from the first DBFM template agreement published by SFT for the hub programme which in turn was developed from the current as at June 2009 Scottish Standard Health PPP Contract which was taken to be the form of contract that had been most recently used for Scottish revenue funded projects and most broadly acceptable to the market Where changes have been made they and the alternative recommended drafting in Appendix 2 of this Guide have mostly been based on market precedents Version 2 ofAll NPD and hub projects will be required to adopt any changes that SFT makes to the Standard Project Agreements Gneluding the standard Service Level Specifications NPD articles_of association and this Users Guide has been preduced and this User s Guide from time to time unless it is demonstrated to SFT that to do so would have a material impact on project costs and or programme General approach The Standard Project Agreements have been developed against the background of a pipeline of accommodation investment plans involving both capital and revenue funding and at a time when public funds whether capital or revenue available for infrastructure investment are severely curtailed They maintain the basic principles
81. ins the case in the final version of the contract See also footnote to Clause 24 6 2 55 3 amp 55 4 If either party is to be given access to any of the other party s computer systems as a matter of good practice and also to clarify potential liability for unauthorised access to those systems under the Computer Misuse Act 1990 the scope of each party s authorisation to access each other s computer systems will need to be defined clearly The terms of such authorisation will be project specific 57 1 The inclusion of the words in square brackets should be considered on a project specific basis 57 4 Alternative drafting for non NHS bodies is provided in Form 10 in Appendix 2 57 9 amp 57 10 Clauses have been added providing a wipe clean of Deductions and Warning Notices for the purposes of Clauses 40 1 9 and 40 1 10 in the event that the Service Provider is replaced on a maximum of two occasions during the life of the project in order to incentivise the SPV to replace an under performing service provider and to facilitate it in so doing 60 The Authority should review the scope of this provision in the light of project specific data processing requirements 61 In line with the general approach taken by the Scottish Information Commissioner these Clauses support a general openness in regard to the project contracts and associated documentation The SFT considers that there are only a very few parts
82. ion report the latest trustees report and accounts together with a statement giving details of the increases in pensions in payment and deferred pensions in each of the last ten years and details of any area where the trustees will operate discretion to improve benefits Liability for Costs Page 68 of 9491 26 13 SCOTTISH FUTURES TRUST All costs incurred in connection with the Admission Agreement and or obtaining a certificate of broad comparability from the Government Actuary s Department shall be borne by Sub hubco Project Co Bulk Transfers 26 14 Sub hubco Project Co shall procure that each Broadly Comparable Scheme shall be able to accept bulk transfers from the LGPS Sub hubco Project Co shall comply with and shall procure that each relevant Service Provider shall comply with the provisions of Section 4 LGPS Bulk Transfer Terms of Schedule Part 24 Employment and Pensions in respect of transfers from the LGPS following the Relevant Service Transfer Date and any subsequent bulk transfers on termination or expiry of this Agreement Sub hubco Project Co Undertaking 26 15 26 16 Sub hubco Project Co undertakes to the Authority for the benefit of the Authority and for the Authority as agent and trustee for the benefit of the Pensionable Authority Employees that it shall and shall procure that any relevant Service Provider shall procure that 26 15 1 the Pensionable Authority Employees shall by three 3
83. is scheduled to occur 1 Confidential Information Any information or classes of information that the parties agree should be treated as Commercially Sensitive Information should be included in Schedule Part 26 Commercially Sensitive Information Standard provisions are included in Schedule Part 26 Commercially Sensitive Information 1 Contract Year This definition is relevant to the timing of annual reviews of Annual Service Payments see Section 2 Interpretation of Schedule Part 1 Definitions and Interpretation paragraph 15 The Authority may prefer to amend the definition such that the timing of reviews occurs at the commencement of the Authority s financial year on 1 April This may assist the Authority in setting annual expenditure budgets although in many cases it will accelerate the timing of the annual review 1 Contracting Associate 31 SCOTTISH FUTURES TRUST Schedule Part Comment This provision should be drafted on a project specific basis to encompass any principal sub contractors to the SPV Discriminatory Change in Law Definition to be completed on a project specific basis and will vary depending on the nature of the Facilities Equipment To be drafted on a project specific basis linked as appropriate to Clause 16 and the Service Level Specification Funding Default See note on Clause 4 7 4 8 in the NPD version Interim Project Report See note on Clause 4 8 4 9 in th
84. ith disclosed Title Conditions and Reserved Rights The Authority must arrange for suitable title due diligence to be carried out by its own or external legal advisors and the preparation of the Title Conditions and Reserved Rights document that discloses any title matters that may reasonably be expected to interfere in any way with the construction of the Facilities and or provision of the Services To be reviewed on a project specific basis Where a project involves phased construction or refurbishment project a phased programme of access may be required 10 This Standard Project Agreement assumes that the SPV is able to carry out any investigations necessary to satisfy itself in relation to Site Conditions To the extent that it is not practical for the SPV to investigate areas of the Site for example due to Authority occupation of Facilities on Site the drafting at Clauses 10 3 and 10 4 can be included to provide the SPV with appropriate relief These Clauses provide that the Authority bears any additional costs arising out of unforeseen conditions in 13 SCOTTISH FUTURES TRUST Clause Comment areas which the SPV cannot investigate and which cannot be reasonably identified by the SPV Areas of the Site to which this carve out applies should be clearly identified in the Agreement It may be appropriate where additional surveys are recommended by the SPV acting in accordance with good industry practice an
85. itoring and measuring Project Co s compliance with them 77 Authorities to consider whether additional contract provisions are appropriate necessary to enable it to discharge its duties under The Equality Act 2010 Specific Duties Scotland Regulations 2012 Schedule Part Comment 1 Definitions and Interpretation 1 Ancillary Documents The Authority should consider if there are any other project significant documents See also note above on Clause 4 1 Associated Companies If a fund or limited partnership or 50 50 owned vehicle which is not a subsidiary or similar is in the relevant ownership chain of the SPV this definition will need to be expanded to cover it If any of the holders of equity in the SPV are limited partnerships or other funds particular attention will need to be given to the Change of Ownership provisions during any lock in period Authority Assets This definition which is only used in the indemnity to the Authority in Clause 49 1 3 is intended to cover those parts of the Authority site that are not the subject of the sole remedy payment mechanism In practice that means those parts of the site to which the SPV does not provide any service or where the SPV does provide services to a facility those parts over which the SPV does not take any element of availability risk The Authority should also consider how equipment is treated if the SPV is not responsible fo
86. l Close as adjusted to take into account any Qualifying Change 1 Permitted Borrowing The Committed Standby Facility if used will be any standby facility that is committed by the Senior Funders at Financial Close for the purposes of funding any unforeseen cost overruns increased expenses or loss of revenues incurred by the SPV If there is no such facility limb c of the definition of Permitted Borrowing will not be required 1 Phase Phase 1 Phase 1 Actual Completion Date etc Cross refer to description of Phases if relevant or delete 1 Senior Funding Agreements These are all documents relating to the Senior Debt and may include e acredit agreement e interest rate hedging agreements and e security documents Alternatively bond documentation may be included in which case the definition will include the bond trust deed the terms and conditions of the bond as well as security documents A monoline insured deal will also include reference to the monoline s Policy and Endorsement and its insurance and Indemnity Agreement each of which will be defined in the Agreement Other financing structures will mean referring to other documents The Authority should place limits on hedging agreements to allow only those agreements that comply with an agreed hedging policy and details of which have been notified to and acknowledged by the Authority to be included in the definitions of Base Senior Debt Termination Amount or Revised Se
87. lause 29 10 the Authority shall be entitled at any time following a Planning Challenge to instruct Sub hubco Project Co in writing to suspend the carrying out of any of the Works to which the relevant Planning Approval relates Such instruction shall cease to have effect upon a Planning Challenge Dismissal being notified by the Authority to Sub hubco Project Co The Authority shall be entitled at any time following a Planning Challenge to instruct Sub hubco Project Co to apply for a new Planning Permission for the Works and the Authority may without prejudice to Clause 11 9 issue an Authority Change Notice varying this Agreement the Authority s Construction Requirements and the Service Level Specification if and to the extent necessary to allow Sub hubco Project Co to proceed with the Works in accordance with the requirements of the new Planning Permission In the event that a Planning Challenge results in an Adverse Planning Decision the Authority shall as soon as reasonably practicable either 11 9 1 serve a notice under Clause 42 1 requiring termination of this Agreement or 11 9 1 issue an Authority Change Notice removing the affected Facilities from the scope of this Agreement and varying the Authority s Construction Requirements to remove those requirements relating to the affected Facilities to which the Adverse Planning Decision relates or 11 9 2 issue an Authority Change Notice instructing Sub hubco Project Co to p
88. maintenance is taking place in accordance with the agreed Schedule of Programmed Maintenance Authorities must ensure that risk in relation to maintenance and replacement lies with the SPV and will need to e develop their output specifications in sufficient detail and Payment Mechanism e consider the grounds for objection in paragraph 3 9 of the Review Procedure in the light of this requirement and the Authority s output requirements Although Schedule Part 18 Handback Procedure deals with the hand back of the asset on expiry the Authority may wish to reserve the right to carry out periodic surveys to ensure that regular maintenance is in fact carried out The Authority should not get involved in the micromanagement of planned maintenance but should have the ability to ensure that any significant deterioration in the facility is avoided Alternatively this may already be achieved via the deductions in the Payment Mechanism 23 3 Authorities will need to consider this provision in the light of how unplanned maintenance will in fact be carried out by the SPV For example if maintenance personnel are to be present full time on the Site it may be more appropriate not to require advance notification but to reserve a right to defer or reschedule any work if it is actually carried out at an inconvenient time 23 13 The Standard Project Agreements place responsibility for interior decoration of walls with the Authority and
89. material use of Utilities to achieve Rectification of Availability Failures it should bear the associated costs It is suggested that a de minimis level is set to avoid the time and effort required to make relatively trivial claims The SFT has suggested that this is linked to the average normal daily cost of each utility but Authorities may prefer to adopt a simpler cash sum in which case it should be index linked 24 3 The warning notice regime is now triggered by the levels of Deductions being made from the Annual Service Payment The trigger levels in this Clause need to be calibrated and to be consistent with that in Clause 40 1 9 24 5 The Authority step in mechanism from the Scottish Standard Health PPP Contract has been replaced with the mechanism from SoPC4 which was also adopted on schools projects 25 Clause 25 contains drafting for projects that envisage staff transfers Alternative drafting for projects where no staff transfers are envisaged is included in Form 7 in Appendix 2 25 3 The drafting reflects current May 2011 TUPE legislation which does not protect pension entitlement 25 4 Reference to the Whitely Agreement applies to staff in the health sector only and should be deleted by other authorities 25 6 The Clause as drafted does not apply to Transferring Private Sector Employees since it is assumed that risk in such cases lies with the incumbent service provider If in fact the
90. mbership of a Broadly Comparable Scheme for Pensionable Authority Employees shall apply in respect of the Pensionable Authority Employees Membership of a Broadly Comparable Scheme for Pensionable Authority Employees 26 11 Where this Clause 26 11 Membership of a Broadly Comparable Scheme for Pensionable Authority Employees applies 26 11 1 Project Co shall procure that each Pensionable Authority Employee shall on the Relevant Service Transfer Date or the Cessation Date as applicable be offered membership of a pension scheme for future service operated by Sub hubco Project Co or the relevant Service Provider which must be Page 67 of 9491 SCOTTISH FUTURES TRUST a established within three 3 months of the Relevant Service Transfer Date or the Cessation Date as the case may be and maintained until any payment to be made under Section 4 LGPS Bulk Transfer Terms of Schedule Part 24 Employment and Pensions is made b reasonably acceptable to the Authority such acceptance not to be unreasonably withheld or delayed c a registered pension scheme for the purposes of Part 4 of the Finance Act 2004 d has in place a relevant contracting out certificate in accordance with Part Ill of the Pension Schemes Act 1993 and e certified by the Government Actuary s Department as broadly comparable to the LGPS assessed following the principles set out in the Statement of Practice issued by the Government Actuary s De
91. ment and the Funders Direct Agreement The relevant discharge terms within the meaning of section 6 of the Local Government Contracts Act 1997 are set out in Schedule Part 27 Relevant Discharge Terms Where Clause 74 applies the following drafting must be included in the Schedule to the Agreement SCHEDULE PART 27 RELEVANT DISCHARGE TERMS 1 The Parties hereby acknowledge and agree that 1 1 1 2 where following an application for judicial review or an audit review within the meaning of the Local Government Contracts Act 1997 a court determines that the Authority did not have power to enter into this Agreement or to enter into this Agreement and the Funders Direct Agreement and that this Agreement or that this Agreement and the Funders Direct Agreement are unenforceable 1 1 1 Sub hubco Project Co shall be entitled to be paid by the Authority a sum equivalent to the amount calculated in accordance with Section 1 Compensation on Termination for Authority Default and Voluntary Termination of Schedule Part 17 Compensation on Termination and 1 1 2 the relevant provisions of Clause 46 Compensation on Termination and Section 5 General of Schedule Part 17 Compensation on Termination shall apply mutatis mutandis subject to compensation being deemed to be payable in a lump sum within 6 months of the order of the court and where following an application for judicial review or an audit review within the meaning
92. mination of this Agreement or of the relevant Sub Contract or 6 1 2 the employment of any Pensionable Authority Employee transferring to a new employer in accordance with the provisions of Clause 25 TUPE and Employment Matters or otherwise Sub hubco Project Co shall procure that the Employer shall procure that the trustees of the Broadly Comparable Scheme offer bulk transfer terms in respect of the relevant Pensionable Authority Employees service in the Broadly Comparable Scheme to the pension scheme of the Authority or any future Service Provider or their sub contractors which are no less favourable in the opinion of the Administering Authority s Actuary or an actuary appointed by the Authority than the bulk transfer terms set out in the Actuary s Letter subject to a reasonable adjustment in respect of market fluctuations since the date of the Actuary s Letter 6 2 If the transfer payment paid by the trustees of the Broadly Comparable Scheme is less in the opinion of the Administering Authority s Actuary or an actuary appointed by the Authority than the transfer payment which would have been paid had paragraph 7 1 been complied with the Employer shall pay to the Authority or any future Service Provider or their sub contractor as appropriate or as such person shall direct the amount of the difference APPENDIX 1 ACTUARY S LETTER To be inserted on a case by case basis for each Employee Transfer to which Section 4
93. ng Whilst this is in principle acceptable the Authority will need to check that i the scope of such additional wording is appropriate e g does not extend to a limitation of liability for fraudulent acts and ii the capped amount is set at a sufficiently high level 16 Change Protocol 16 The Authority must consider whether it wishes to have the right to carry our Derogated Low Value Changes and should delete the defined term in Section 1 and paragraphs 1 2 and 1 3 in Section 2 if not required The Authority should consider the suitability of the thresholds between the three categories of Authority Changes see the individual definitions but should not propose changes without prior approval from SFT The Authority should consider the limit on senior funders due diligence costs paragraph 12 in Section 3 and paragraph 13 in Section 4 but should not propose changes without prior approval from SFT The Change Protocol envisages that the parties agree a Catalogue that will govern the pricing of low value changes Including a well developed Catalogue in the Agreement from day 1 will be in both parties interests as it will create a clear and practical framework with greater price certainty for agreeing day to day low value changes 17 Compensation on Termination 17 Section 1 Paragraph 1 1 Consistency of approach to compensation on Authority Default and Authority Voluntary termination avoids any inc
94. ng or compliance with the planning process 12 The design requirements for thermal and energy efficiency and for monitoring and remedies that existed in this Clause in the Scottish Standard Health PPP Contract have been removed See comments at Schedule Part 6 If the Authority has specific fuel source requirements in relation to energy such as biomass or photovoltaic cells or multi fuel capability drafting should be added to 14 SCOTTISH FUTURES TRUST Clause Comment ensure that if the SPV fails to provide or maintain the necessary equipment and that results in the Authority incurring increased fuel costs or losses of income the SPV will be obliged to compensate the Authority whether or not it has incurred Deductions 12 1 1 Health Boards need to ensure compliance with HDL 2002 11 Corporate Governance Statement on Internal Control SIC 12 4 3 Applicable where the Authority is a health board Other Authorities should consider additional requirements they may have on a project specific basis 12 5 It is essential that the Authority reviews the final version of the SPV s Proposals shortly before contract signature in order to ensure that these satisfy the Authority s requirements for Operational Functionality and that it is happy to give sign off on this limited basis The Authority must have the right to notify the SPV of its comments qualifications in relation to Operational Fun
95. ng process or on a hub project the New Project Approval process 25 35 Authorities should ensure that this obligation is passed on in the contract with the new service provider 25 39 This Clause only applies if the Authority is a health board 26 This Clause will not be used where there are no transferring employees The standard drafting assumes that pensions will be provided by way of a GAD scheme For authorities where the LGPS is applicable alternative drafting is set out in Form 8 in Appendix 2 26 1 Authorities should ensure that certificates from the Government Actuary s Department in respect of relevant pension schemes are available prior to contract signature and also three months before each Relevant Service Transfer Date 26 3 The requirements as to the provision of documentation concerning the SPV or Service Provider s pension scheme are as stated in Public Private Partnerships in Scotland Protocol and Guidance concerning Employment Issues 26 5 2 In accordance with Public Private Partnerships in Scotland Protocol and Guidance concerning Employment Issues NHS Authorities must require broadly comparable pension arrangements to be secured on second or subsequent transfers These should as a minimum protect the benefits which enabled the first scheme into which relevant staff transferred to be certified by GAD 26 6 As envisaged by HM Treasury guidance Fair De
96. nge within 20 Business Days of receipt of a valid invoice therefor The Authority shall be entitled at any time to request a breakdown of costs incurred and or an estimate of costs likely to be incurred by Sub hubco Project Co in complying with this Clause 11 3 The parties shall each 11 4 1 provide to the Relevant Authority all relevant evidence and information that is available to Sub hubco Project Co and or the Authority and that may be lawfully disclosed to the Relevant Authority and employed by it in the effective defence of the Planning Challenge and 11 4 2 co operate with the Relevant Authority in the provision of witnesses in the defence of the Planning Challenge Sub hubco Project Co shall continue to discharge its obligations under this Agreement save to the extent that 11 5 1 Sub hubco Project Co as a consequence of the Planning Challenge is prevented by Law or any interim order of a Relevant Authority from progressing the Works which shall include an Adverse Planning Decision and or 11 5 2 Sub hubco Project Co is instructed by the Authority pursuant to Clause 11 7 to suspend the carrying out of the Works Page 54 of 9491 11 8 11 10 11 11 SCOTTISH FUTURES TRUST To the extent that Sub hubco Project Co is prevented from progressing the Works as a consequence of an event listed in Clause 11 5 such event shall be deemed to be a Delay Event and a Compensation Event Without prejudice to C
97. nior Debt Termination Amount as appropriate The hedging policy may of course change over time which will require agreement at the time Where referred to in the Agreement Senior Funding Agreements should mean those agreements as at the date of the Agreement as may be amended with the approval of the Authority pursuant to Clause 4 3 This is particularly important if Senior Debt is paid on early termination of the Agreement On signature of the Agreement the Authority has an assumed profile of its termination liabilities based on the financing structure in place at financial close the Authority should therefore generally have the right to approve any amendments to the financing agreements that would have the effect of changing the Authority s liability profile If the SPV makes changes to the Senior Funding Agreements which have not been approved by the Authority for the purposes of Clause 4 3 they will be disregarded for the purposes of calculating termination sums unless they qualify as Additional Permitted Borrowing 33 SCOTTISH FUTURES TRUST Schedule Part Comment 1 Whitley Agreements Include only where the incumbent employer of transferring staff is a health board or subcontractor of a health board or delete if no employee transfers 1 amp 14 Indexation The drafting assumes RPI as the index for both general indexation of amounts that are to be maintained through the life of the project at broadly
98. nism for payment of surpluses to the Authority for NPD projects Clause 36 A small number of clauses have been dropped from the standard form on the basis that they have been found to be of little or no practical benefit in operational projects These include Disaster Plan Clause 10 Liaison Clause 12 and Custody of Financial Model Clause 36 In some cases clauses have been replaced with drafting taken from other market precedents standard forms These include the Authority Step in and Warning Notices mechanisms Clause 24 The following material changes have been made to the risk transfer o Title risk other than the risk of compliance with disclosed title information and or Reserved Rights is taken by the public sector Clause 9 and Schedule Part 5 o Risk of physical works being required to the facilities as a result of any unforeseen change in law during the operational period is retained by the Authority Clause 32 o Energy usage and price risks are retained by the Authority but service standards have been added to incentivise the service provider to do those things that significantly influence energy consumption and are within its control o Insurance premium risk sharing in relation to market related changes has been dropped so that insurance premiums become mainly a pass through cost but measures have been added to ensure that the project insurances are procured on terms that represent best value for money for the Autho
99. nition is project specific and in the case of bond finance will need to refer to the principal outstanding amount indexed or otherwise and or the early redemption price mechanism by reference to the terms and conditions of the bonds and will need to be approved by the SFT Spens will be payable only on Authority Default and Authority Termination as will the Spens calculation methodology Authorities may consider whether they should exclude any future profit element from the calculation of costs of early termination of interest hedging arrangements where the termination is for force majeure breach of refinancing corrupt gifts and uninsurability Senior Debt Amount This definition assumes debt finance In practice the definition is project specific and in the case of bond finance will need to refer to the principal outstanding amount indexed or otherwise and or the early redemption price mechanism by reference to the terms and conditions of the bonds and will need to be approved by 46 SCOTTISH FUTURES TRUST Schedule Comment Part the SFT Sub Contractor Losses The Authority must review sub contracts to ensure that payments due on early termination are not excessive e g operational subcontracts where operational phase has not yet started 18 Handback Procedure 18 Paragraph 2 1 The Authority should ensure that its handback requirements are clearly set out in the Authority s Construction Requi
100. ns Note that the breach drafting is in Clause 45 The threshold levels for sharing and capping the return to equity will be those set out in the template DBFM Project Agreement within the relevant Territory Partnering Agreement NPD This Clause contains the obligation on the SPV to pay Surpluses to the Authority and obliges compliance with the NPD Requirements principally related to the structure and governance arrangements within the SPV This should be read in conjunction with the Mandatory NPD Articles of Association 36 8 2 Consider whether it is necessary to set out how the reduction is to be calculated and applied 37 SFT considers that having custody of the financial model contracted to a third party such as the National Computing Centre is an unnecessary cost and that parties ought to be able to safeguard their own copies of the base case financial model and any amended versions during the life of the project The Authority should ensure that it has suitable contract management arrangements in place for obtaining updates of the financial model as well as arrangements for safeguarding these The Authority will be required to supply the SFT with a copy of the financial model at financial close and whenever it is amended 23 SCOTTISH FUTURES TRUST Clause Comment 39 1 See Form 9 of Appendix 2 for additional Authority Events of Default to be included where the Authority is not a health board
101. nuation Act 1972 as amended from time to time means the Local Government Pension Scheme Administration Scotland Regulations 2008 means the Local Government Discretionary Payments and Injury Benefits Scotland Regulations 2008 means the LGPS Administration Regulations the LGPS Compensation Regulations and the Local Government Pension Scheme Benefits Membership and Contributions Scotland Regulations 2008 means an Authority Employee who is a member of or is entitled to be a member of the LGPS on or immediately prior to the Relevant Service Transfer Date Where this alternative Clause 26 drafting is used the following provisions should be added to Schedule Part 24 Page 73 of 9491 SCOTTISH FUTURES TRUST SECTION 4 LGPS BULK TRANSFER TERMS The provisions of this Section 4 i of Schedule Part 24 i shall apply in relation to each Employee Transfer during the term of this Agreement which affects Pensionable Authority Employees In relation to each such Employee Transfer the provisions of this Section 4 LGPS Bulk Transfer Terms of Schedule Part 24 Employment and Pensions shall apply save that Sub hubco Project Co and the Authority both acting reasonably shall agree such amendments to the provisions of this Section 4 LGPS Bulk Transfer Terms of Schedule Part 24 Employment and Pensions as are required to reflect the specifics of the transfer in terms of details of the Administering Authority s Actuary the
102. o Information 21 This has been included as an example only and the Authority should amend as appropriate to its individual project 23 Refinancing 23 On NPD projects Schedule Part 23 should be read in conjunction with the Mandatory NPD Articles of Association which set out the Public Interest Director s rights in relation to instigating Refinancing which in turn mirror the rights that sit with the Authority under SoPC4 guidance Paragraph 5 The Authority should take into account UK Accounting Standards when deciding how to take any share in refinancing out of the project Under current March 2011 47 SCOTTISH FUTURES TRUST Schedule Part Comment Accounting Standards the Authority will be required to take the benefit by way of a reduction in Annual Service Payments under paragraph 5 2 to ensure that benefits from the Project are seen to be applied to the Project Paragraph 5 NPD projects only Mirror provisions to be included in the Subordinated Funding Agreements to allow the subordinated lenders to receive payment of Project Co s share of the Refinancing Gain The parties ought to be entitled to receive their share of the Refinancing Gain in a lump sum to the extent that the Refinancing creates an amount capable of immediate payment subject to accounting and tax considerations in respect of which Authorities should take advice To the extent that the Authority elects and or the Refinancing Gain arises th
103. o so and for any costs claims or liabilities for redundancy payments whether statutory or contractual If an offer of employment is made in accordance with Clause 25 9 the employment shall be on the same terms and conditions as applied immediately before the expiry or earlier termination of this Agreement including full continuity of employment except that the Authority or other new service provider may at its absolute discretion not offer such terms and conditions if there has been any change to the terms and conditions of the persons concerned in breach of Clause 25 8 Page 64 of 9491 SCOTTISH FUTURES TRUST Form 8 LGPS Pension Provisions Sub hubco Project Co to become an Admission Body Where Sub hubco Project Co or any relevant Service Provider employs any Pensionable Authority Employees from a Relevant Service Transfer Date it shall offer those Pensionable Authority Employees membership of the LGPS and Sub hubco Project Co shall procure that it and or any relevant Service Provider shall become an Admission Body Sub hubco Project Co shall before the Relevant Service Transfer Date execute and procure that any relevant Service Provider executes an Admission Agreement which will have effect from and including the Relevant Service Transfer Date Liability for underfunding prior to Relevant Service Transfer Date 26 2 Where Sub hubco Project Co and or any relevant Service Provider becomes an Admission Body the part
104. on simply reduces the amount of any prepayment and is therefore neutral In reality on the SPV Default d and e are likely to be the same amounts Base Senior Debt Termination Amount This definition assumes debt finance In practice the definition is project specific and in the case of bond finance will need to refer to the principal outstanding amount indexed or otherwise and or the early redemption price mechanism by reference to the terms and conditions of the bonds and will need to be approved by SFT Spens will be payable only on Authority Default as will the Spens calculation methodology For the sake of simplicity consider including a separate definition of Base Authority Default Senior Debt Amount which is identical save for the inclusion of Spens Authorities may consider whether they should exclude any future profit element from the calculation of costs of early termination of interest hedging arrangements where the termination is for force majeure breach of refinancing corrupt gifts and uninsurability Contingent Funding Liabilities This is intended to be an exhaustive list of all such arrangements put in place at financial close 45 SCOTTISH FUTURES TRUST Schedule Part Comment Deemed New Agreement The Termination Date here is the relevant date as no new contract is actually being entered into Maximum Termination Amount NPD projects only In line with NPD principles this ensures that P
105. or Debt Termination Amount or Revised Senior Debt Termination Amount as the case may be outstanding at any relevant time The receipt by the Senior Funders Agent of the Base Senior Debt Termination Amount or Revised Senior Debt Termination Amount or elements thereof as appropriate as the case may be and where appropriate any accrued interest or breakage costs as certified in accordance with paragraph 5 1 above shall discharge the Authority s obligations to pay such sums to Sub hubco Where this alternative drafting is used in Section 5 of Schedule Part 23 the following definitions should be added to Section 6 of Schedule Part 23 Page 87 of 9491 Credit Agreement Notice Date Outstanding Principal Termination Sum SCOTTISH FUTURES TRUST means as at the date of this Agreement or as amended as permitted pursuant to Clause 4 Project Documents means the later of the Termination Date and if paragraph 4 No Retendering Procedure of Section 2 Compensation for Sub hubco Default of this Schedule Part 17 Compensation on Termination applies the date that the Adjusted Estimated Fair Value of the Agreement has been agreed or determined means the principal amount outstanding at the Termination Date of each borrowing other than any borrowing under any equity bridge facility under the Credit Agreement means any compensation payable by the Authority to Sub hubco Project Co pursuant to
106. ority If different Core Times apply to different Functional Areas within the Facilities then the drafting that defines the Gross Monthly Availability Deduction by reference to the Daily SUF should be selected Minimum Availability Deduction The drafting of this definition has been updated in Version 2 the intention being that the Minimum Availability Deduction indexes in line with the Annual Service Payment Logged Rectification Time amp Logged Report Time The drafting in these definitions should be aligned with the Service Level Specification requirements for record keeping in the event of Helpdesk system failure Rectification Period The drafting assumes that Service Events reported outside Core Times will be relatively rare and will generally be of a type that requires the SPV to Respond by attending and making safe Rectification Periods will therefore only begin at the start of the next Core Time If an Authority wishes a higher level of service so that Rectification Periods are the same irrespective of when the Logged Report Time it should evaluate the costs and benefits of that requirement Service Unit Rate If a single set of Core Times applies to the whole of the Facilities then the SUR for a Contract Year is the Annual Service Payment for that Contract Year divided by the product of multiplying the Service Units for the Facilities and the number of Days in the relevant Contract Year If on some days only some Func
107. ount equal to the Exit Contribution to the Administering Authority for immediate credit to the LGPS Sub hubco Project Co and or any relevant Service Provider shall be responsible for any part of any Exit Contribution arising on termination of the Admission Agreement which relates to any unpaid contributions due under the Admission Agreement up to the date of termination of the Admission Agreement in so far as those unpaid contributions related to any amount payable under Clause 26 2 3 a Project Co ceases to be an Admission Body 26 10 If Sub hubco Project CoJand or any relevant Service Provider employs any Pensionable Authority Employees from a Relevant Service Transfer Date and 26 10 1 the Authority Sub hubco Project CoJand or any relevant Service Provider are all of the opinion that it is not possible to operate the provisions of Clause 26 1 Sub hubco Project CoJto become an Admission Body to Clause 26 9 inclusive or 26 10 2 for any reason after the Relevant Service Transfer Date Sub hubco Project Co and or any relevant Service Provider ceases to be an Admission Body other than on the date of termination or expiry of this Agreement or because it ceases to employ any Pensionable Authority Employees then the provisions of Clauses 26 1 Sub hubco Project Cojto become an Admission Body to 26 9 shall not apply without prejudice to any rights of the Authority under those clauses and the relevant provisions of Clause 26 11 Me
108. partment as current at the time 26 11 2 Sub hubco Project Co shall ensure that a certificate from the Government Actuary s Department referred to in Clause 26 11 1 e for the Broadly Comparable Scheme shall be delivered to the Authority on or before signature of this Agreement or on or before the Cessation Date as applicable and shall provide confirmation that the certificate s remain in force three 3 months before each Relevant Service Transfer Date or Cessation Date as the case may be in respect of each Pensionable Authority Employee who is to be offered membership of the pension scheme to which the certificate relates GAD Certificate 26 12 The Authority shall provide Sub hubco Project Co with such information as it or any Service Provider may reasonably require in relation to the LGPS to enable Sub hubco Project Co or any relevant Service Provider to submit a proposal to the Government Actuary s Department to assess the comparability of the Broadly Comparable Scheme The Authority may at its option provide such information directly to the Government Actuary s Department Sub hubco Project Co shall and it shall procure that any relevant Service Provider shall provide such documentation as is required to enable the Government Actuary s Department to consider the question of comparability including but not necessarily limited to the Trust Deed and Rules of the Broadly Comparable Scheme the latest actuarial valuat
109. payment and discount for cash needs to be discussed with the Administering Authority If this is to be covered in the Actuary s Letter this clause can be deleted 15 It may be necessary to refer to the Actuary s Letter to determine what actuarially equivalent value means Actuarially equivalent value is the term used in the HM Treasury Guidance A Fair Deal for Staff Pensions Procurement of Bulk Transfer Agreements and Related Issues 16 The Local Authority may wish to consider whether it wants to seek to ring fence any Transfer Amount within the Broadly Comparable Scheme The Local Authority should consult with its professional advisers regarding this option 17 It may be necessary to refer to the Actuary s Letter to determine what actuarially equivalent value means Actuarially equivalent value is the term used in the HM Treasury Guidance A Fair Deal for Staff Pensions Procurement of Bulk Transfer Agreements and Related Issues Page 77 of 9491 18 19 20 SCOTTISH FUTURES TRUST relevant Fund to pay an amount larger than the Transfer Amount to the Broadly Comparable Scheme in respect of the Transferring Members Exit Provisions 6 1 Sub hubco Project Co undertakes on its own behalf and on behalf of the Employer to the Authority for the benefit of the Authority itself and for the Authority as agent and trustee for the benefit of its Pensionable Authority Employees that on 6 1 1 the expiry or ter
110. r Regulations have effect after the date or dates of such transfer as agreed by the parties each a Relevant Service Transfer Date or at any other time as if originally made between those persons and the relevant Service Provider If it is subsequently agreed or determined that there are persons presently employed by the Authority or any other sub contractor of the Authority whose contracts of employment do have effect after the Relevant Service Transfer Date as if originally made between those persons and the relevant Service Provider Transferring Staff then 25 2 1 the Authority shall within ten 10 Business Days of the date on which it was so agreed or determined have the opportunity to offer or procure the offer of a position as an employee of the Authority to some or all of the Transferring Staff 25 2 2 Sub hubco Project Co shall procure that no person to whom the Authority has offered a position in accordance with Clause 25 2 1 shall be dismissed by reason of redundancy until the period for acceptance of such offer has expired and the person in question has not accepted such offer and 25 2 3 subject to Clauses 25 2 1 and 25 2 2 Sub hubco Project Co or any Service Provider shall be entitled to dismiss any or all of the Transferring Staff by reason of redundancy provided that Sub hubco Project Co shall use and shall procure that any Service Provider shall carry out in the required manner any obligation to consult with t
111. r maintenance and lifecycle of any items of equipment then such items should be included within the definition Authority Policies The relevant policies will vary on a project specific basis but an Authority should consider including Scottish Procurement Policy Note SPPN 0 2009 as the same 30 SCOTTISH FUTURES TRUST Schedule Comment Part may be updated or superseded from time to time 1 Authority Services NPD only The Authority should complete on a project specific basis to reflect services whether public facing or administrative or support services being provided at the Facilities 1 Certificate of Commencement This is only required if financial close does not coincide with contract signature in which case suitable drafting to deal with conditions precedent will be required at Clause 2 1 Collateral Agreements The Authority should specify on a project specific basis what professional team collateral warranties and key subcontractor i e with design responsibility collateral warranties are required 1 Community Services hub only The Authority should complete on a project specific basis to reflect services whether public facing or administrative or support services being provided at the Facilities 1 Completion Criteria Additional definitions consequent upon multiple phases drafting appear in square brackets 1 Completion Date Insert agreed date on which completion
112. r using a corresponding provision on a project specific basis 52 Any warranties to be given by the Authority must be justified on a project specific basis it is expected that such circumstances will be limited for example where the Authority is the only source of the information and the SPV has no means of obtaining or verifying that information itself Increasingly the private sector is requiring warranties as to the accuracy of certificates of title These are not considered to be necessary in transactions such as these if there is no security being granted over the property To the extent that a problem with title arises then the SPV s remedy is either through a Delay Compensation Event or an Excusing Cause on the basis that it will constitute a breach of Clause 9 If a warranty is required then the Authority should consider qualifying it to the best of the Authority s knowledge belief and information Authorities should note that the Standard Project Agreements assume that the Authority will not warrant information disclosed to the SPV referred to as Disclosed Data and expressly excludes liability in this regard A breach of warranty should give rise to a claim for damages or a price variation mechanism could be introduced to the Agreement Breach should not give rise to a right for the SPV to terminate 53 Insurance premiums are generally a pass through cost and there are no provisions for sharing premium risk save that the con
113. raph 5 This paragraph is intended as a framework only and should be developed in a project specific basis Appendix 2 To be completed by the Authority on a project specific basis 10 Outline Commissioning Programme 10 To be considered in light of Clauses 17 Pre Completion Commissioning and 18 Post Completion Commissioning and the commissioning activities start up of services to be carried out during those periods This should outline who is responsible for what and when and set out the principles for all completion tests and inspections For many projects there is likely to be no requirement for commissioning either before or after the Facilities are otherwise complete In those cases this Schedule Part may become no more than the Completion Criteria against which to test completion of the Facilities In any event the completion criteria should be limited to matters for which the construction sub contractor will be solely responsible as senior funders will want to be certain that the construction sub contractor is liable for liquidated damages if the Payment Commencement Date is delayed for any reason other than a Compensation Event Authorities should also beware of including requirements in the Completion Criteria such as decanting Authority equipment from existing premises that risk leaving the Authority with no option but to accept service commencement despite not all the Completion Criteria having been met 11 Equipment 11 This should
114. rational Insurance premiums energy NHS bodies only rates and water charges are pass through costs e Temporary rectification is potentially acceptable to rectify Service failures Authorities must contact SFT for further guidance in calibrating the Payment Mechanism Service Level Specification 14 Section 1 Core Times These should be the times during which the Facilities are generally expected to be inuse It may be that different Core Times apply to different Functional Areas within the Facilities e g limited to sports facilities at a school at weekends See comments below for the implications this will have in relation to the Gross Monthly Availability Deduction and the Service Unit Rate External Utility Failure No relief for External Utility Failure should be required where the SPV is required to provide back up arrangements and so this definition may require amendment on a project by project basis Gross Monthly Availability Deduction The monthly cap on Deductions operates so as to ensure that over the course of a year the total Deductions will be capped at an amount equal to the Annual Service 40 SCOTTISH FUTURES TRUST Schedule Part Comment Payment In any Contract Month that the monthly cap exceeds the Monthly Service Payment the drafting provides for the excess to be carried forward and set off against future Monthly Service Payments rather than being an amount payable by the SPV to the Auth
115. rces analysis and all costs for carrying out the Asbestos Works at the relevant Demolition Site on the basis of the Asbestos Survey Report to enable robust and transparent verification of all allowances within the tender and shall procure that the Asbestos Works are completed by the Licensed Contractor in accordance with the requirements of Clause 6 2 10 12 To the extent that only as a result of the nature and or extent and or location of the Additional Asbestos the period of time taken to complete the Asbestos Works at a Demolition Site is longer than the relevant Asbestos Works Period Additional Asbestos Delay Sub hubco Project Co will be entitled to apply for relief from its obligations and or compensation in accordance with Clause 30 Delay Events provided that compensation for any additional direct costs and associated expenditure incurred by Sub hubco Project Co for the removal and disposal of the Additional Asbestos shall be calculated on the basis of the schedule of rates set out in the Licensed Contractor s tender Part of the Schedule and paid as provided for in Clause 10 13 below and Clause 30 Delay Events shall be construed accordingly 10 13 In respect of any additional direct costs and associated expenditure incurred by Sub hubco Project Co as a result of the nature and or extent and or location of the Additional Asbestos at a Demolition Site whether or not there has been an Additional Asbestos Delay 10
116. reement for failure to satisfy a trivial or insignificant CP If financial close and contract signature are not simultaneous owing to the existence of any CPs the parties will need to agree how risks relating to interest rate fluctuations between contract signature and financial close are to be allocated Consideration will also need to be given as to whether the definition of Project Term should be amended so as to commence on financial close rather than the date of signature of the Agreement The Independent Tester Contract is dealt with in Clause 15 Independent Tester and Schedule Part 13 Independent Tester Contract The Standard Project Agreements envisage that the independent tester will have obligations jointly to the Authority and the SPV If in exceptional cases these obligations are owed to the SPV alone the definition of Ancillary Documents should be extended to cover the Independent Tester Contract The Authority s consent should not be given unless the Additional Permitted Borrowing Limit has been reached The SPV s obligation under the NPD model to pay Surpluses to the Authority is subject to the provisions restrictions contained in the Funding Agreements Authorities will need to do diligence on the Funding Agreements before financial close and ensure that the provisions restrictions on the payment of Surpluses are appropriate and the drafting in Clause 4 4 protects the Authority from any changes to the Funding Agr
117. relevant survey contained Page 53 of 9491 SCOTTISH FUTURES TRUST Form 3 Planning Challenge 11 3 Either party shall on becoming aware of a Planning Challenge notify the other party and the parties shall consult and generally co operate with each other in good faith with a view to mitigating the effects of the Planning Challenge Such consultation shall include discussion as to the likelinood of the Planning Challenge being successfully defended whether either party or both parties should take any action to seek to resist the Planning Challenge and or whether an application for a new Planning Permission should be submitted in which case Clause 11 8 shall apply Without prejudice to the foregoing generality Sub hubco Project Co shall within 10 Business Days of receipt of a written request provide the Authority with an estimate of 11 3 1 the costs and liabilities and other consequences that Sub hubco Project Co considers are likely to arise if the Works are suspended and recommenced following determination of the Planning Challenge and or 11 3 2 the costs that Sub hubco Project Co considers are likely to be incurred in respect of an application for a new Planning Permission The Authority shall reimburse Sub hubco Project Co for any costs reasonably and properly incurred by it in complying with this Clause 11 3 including taking such action as the Authority may direct it to take to seek to resist the Planning Challe
118. rements or alternatively in this Schedule Part 18 For NHS bodies as well as complying with the residual design life requirement as a minimum all components of the Physical Facet as described in Estatecode ISBN 0 11 322549 0 should subject to the point made below meet Condition B i e be sound operationally safe and exhibit only minor deterioration as is more fully described in Estatecode Section 4 Facet 1 Physical condition Condition B will not be the appropriate standard for some other facets of the Facilities e g components relating to fire protection health and safety statutory requirements etc The Authority should ensure that such requirements are also dealt with The Authority should ensure that where any component falls short of Condition B rectification work should be planned to bring such component up to Condition B or equivalent within 6 months of the time at which the component is surveyed in this situation that the SPV is obliged to carry out such work and that the Authority has adequate remedy where the SPV fails to do this Non NHS bodies should seek advice on suitable alternative standards 19 Record Provisions 19 Section 1 has been included for the purpose of providing a general framework and should be amended to reflect project specifics The records to be kept by the SPV are to be determined on a project specific basis but should as a minimum include those items listed in Section 2 21 Sub hubco Project C
119. rements set outin in accordance with Project Co s Community Benefits Method Statements set out in If in relation to the Works Project Co does not 2 1 insert target then Project Co shall pay to the Authority the sum of insert amount indexed 2 2 insert target then Project Co shall pay to the Authority the sum of insert amount indexed 2 3 insert target then Project Co shall pay to the Authority the sum of insert amount indexed 2 4 provide the quarterly annual information in accordance with then on the occurrence of each such failure Project Co shall pay to the Authority the sum of insert amount indexed provided that in each case the Authority has first served notice on Project Co notifying it of its non compliance and Project Co has failed to rectify such non compliance within twenty Business Days of such notice The Authority s sole and exclusive remedy in respect of a breach of Clause 2 above shall be the payments provided for in Clause 2 and Project Co s maximum liability in this respect shall be insert amount indexed If in relation to the Services Project Co does not 4 1 insert target then Project Co shall pay to the Authority the sum of insert amount indexed 4 2 insert target then Project Co shall pay to the Authority the sum of insert amount indexed 4 3 insert target then Project Co shall pay to the Authority the sum of insert amount indexed 4 4 prov
120. risk is to lie with the Authority the Authority will need to assess whether the inclusion of Transferring Private Sector Employees in this Clause would represent value for money 18 SCOTTISH FUTURES TRUST Clause Comment 25 7 Review on a project specific basis 25 9 The First Employee List will normally detail the following i staff reference number ii date of birth iii age iv job title v start date vi continuous service date length of reckonable service vii contract hours viii sex M F ix location x department xi NI letter A or D xii scale and point xiii salary xiv superannuation xv allow deduction code This is not an exhaustive list The information provided by the Authority prior to financial close may be inaccurate e g due to staff turnover by the time service transfer occurs Rather than rely on the Authority warranting the employee information the Standard Project Agreements provide for the SPV s price to be adjusted to reflect the cost effect of differences between the information about the Authority s workforce given to the SPV when it submitted its final bid or in the case of a hub project its Stage 2 Submission which can be adjusted prior to financial close to reflect up to date information and the actual workforce that transfers to the Service Provider 25 10 Clause 25 12 allows for further adjustments to be made where information contained in the final
121. rity Schedule Part 14 and Schedule Part 15 The changes to risk transfer have been made to improve value for money in the belief that historically either little or no risk transfer was achieved in practice or else the risks transferred were being fully priced by the private sector and therefore paid for by the public sector whether or not the risk actually occurred Changes of approach have also been adopted in relation to other risks SCOTTISH FUTURES TRUST o Energy efficient design will be a design requirement and will be managed through design review monitoring during construction and testing by appropriate completion tests prior to handover o Malicious damage will be a public sector risk although the service provider will still provide the reactive maintenance to rectify malicious damage subject to reimbursement of costs The Authority will be best placed to manage this risk given that it will as standard be retaining responsibility for security and portering janitorial services at the facilities and so any attempt to transfer this risk to the private sector is unlikely to represent value for money o Internal decoration window cleaning and floor coverings and Authority equipment are excluded from the maintenance service The Authority will have minimum periodic maintenance obligations for these items The service also excludes PAT testing of the Authority s electrical equipment o Variations are regulated by a version of t
122. rity to perform the obligations under the guarantee and the obligations of the Authority under this Agreement and any other agreements to which such assignation transfer or disposal relates to 57 4 4 any other Participant which has sufficient financial standing or financial resources to perform the obligations of the Authority under this Agreement and any other agreements to which such assignation transfer or disposal relates without the consent of Sub hubco Project Co The prior written consent of Sub hubco Project Co not to be unreasonably withheld or delayed shall be required for any other assignation transfer or disposal by the Authority of the whole or any part of this Agreement or of any agreement entered into in connection with this Agreement to which the Authority and Sub hubco Project Co are both party provided that nothing in this Clause shall restrict the rights of the Scottish Ministers to effect a statutory transfer 21 Insert a description of the category of public body that the procuring authority falls within if not a local authority 22 For hub projects only Page 80 of 9491 SCOTTISH FUTURES TRUST Form 11 Local Government Contracts Act 1997 and Relevant Discharge Terms 74 Local Government Contracts Act 1997 74 1 74 2 Sub hubco Project Co hereby consents to the issue by the Authority of certificates under section 3 of the Local Government Contracts Act 1997 in respect of this Agree
123. roceed with an application for a new Planning Permission in respect of the Facilities affected and if and to the extent necessary varying the Authority s Construction Requirements and or Sub hubco s Project Co s Proposals in a manner that satisfies the grounds on which the Planning Challenge was successful or 11 9 3 issue an Authority Change Notice varying this Agreement the Authority s Construction Requirements and Service Level Specification if and to the extent necessary to allow Sub hubco Project Co to proceed with the Works in accordance with the requirements of a new Planning Permission obtained prior to the Adverse Planning Decision as referred to in Clause 11 8 above If a new Planning Permission is obtained pursuant to an instruction issued under Clause 11 9 2 the Authority shall issue an Authority Change Notice varying this Agreement the Authority s Construction Requirements and the Service Level Specification if and to the extent necessary to allow Sub hubco Project Co to proceed with the Works in accordance with the requirements of the new Planning Permission The Authority shall not be entitled to withdraw an Authority Change Notice issued under Clause 11 8 Clause 11 9 or Clause 11 10 3 Add the occurrence of circumstances deemed to be a Delay Event pursuant to Clause 11 6 to the list of Delay Events in Clause 29 3 and the occurrence of circumstances deemed to be a Compensation Event pursuant to Clause 11 6
124. roject Co does not make any windfall gain from compensation on termination for Project Co default New Agreement This should also include other documents entered into between the parties where appropriate In projects in which the Service ceases to be required on or shortly after the original expiry Date then the term of the New Contract will be reduced and so Post Termination Service Amounts will not be deducted or added back Post Termination Service Amount This payment is made both to ensure that the Authority is incentivised to expedite the retender and that any value received by the Authority is reflected post termination Usage based payments will need to be addressed specifically It is recommended that their effects are where possible stripped out A positive Post Termination Service Amount will occur where the cost incurred by the Authority in procuring the Service itself including rectification costs is less than the Monthly Service Payment A negative Post Termination Service Amount will arise if the costs incurred in procuring the Service including rectification costs are greater than the Annual Service Payment Qualification Criteria If tenderers are not required to bid on the basis of a single capital payment then the Authority would have to fund the delay in payment of the compensation amount which is not recommended Revised Senior Debt Termination Amount This definition assumes debt finance In practice the defi
125. roughout the life of the project e g where there is a change in senior debt margin it will be payable or as the case may be taken as a unitary charge reduction throughout the remainder of the project Exempt Refinancing The defined terms referred to in limb c vi should follow those contained in the Senior Funding Agreements the Initial Availability Period being the construction phase drawdown period These will need to be checked Qualifying Institutions If there are particular institutions which for particular reasons do not come within the other heads of Qualify Bank Transaction the SPV may propose to the Authority that such institutions be included as Qualifying Institutions In the light of the broad drafting of the other provisions in the definition of Qualifying Bank Transaction the Authority would expect any such proposal to be specific and limited Broad group definitions will not be entertained Refinancing Gain NPD projects only The commercial position is that Project Co s share of the Refinancing Gain is paid to the subordinated lenders rather than directed to the Surplus Account Provision therefore needs to be made in the Subordinated Funding Agreements for that payment to be made To avoid circularity the overall Refinancing Gain needs to be calculated on the basis of arrangements before that payment is made Threshold Equity IRR This is the nominal post tax i e post tax with respect to the SPV pre tax
126. s see Clause 53 6 Subrogation and Vitiation 49 1 2 Deliberate acts or omissions do not include acts or omissions which are within the contemplation of the parties or provided for in this Agreement see paragraph 10 of Section 2 Interpretation of Schedule Part 1 Definitions and Interpretation 49 2 A general indemnity has not been included in relation to Authority breach The SPV has its express rights under the agreement for example Delay Event Compensation Event and Excusing Causes and its rights to sue for breach of contract in order to recover any additional loss 49 2 1 See note on Clause 49 1 1 49 2 3 The Authority s indemnities relating to physical damage in Clauses 49 2 3 and 49 2 4 do not cover physical damage caused by negligent acts or omissions The SPV should insure against that risk Authorities should not act as insurers of last resort in those circumstances The indemnity in Clause 49 2 3 also excludes liability for acts of malicious damage which are dealt with under Clause 49A 49A The drafting now included in Clause 49A is based on what was Form 5 of the User s Guide that accompanied Version 1 with changes having been made to address the following the drafting now refers only to malicious damage rather than to malicious damage or vandalism on the basis that these amount to the same thing malicious damage caused by Project Co Sub hubco Parties shoul
127. s agreed The Authority may wish to consider whether the Project Operations ought to be suspended whilst the Change process is ongoing e g to avoid abortive works and costs being incurred in which case it would be appropriate to factor the time cost implications of such suspension in the SPV s claim for a Delay Event and Compensation Event 29 3 9 Include where Clauses 10 3 and 10 4 are used 29 10 4 Include where Clauses 10 3 and 10 4 are used 30 1 Should particular project specific circumstances warrant the list of events could be extended to include other similar events with the SFT s approval However the Authority should not permit the inclusion of a catch all provision to the extent that any event outside the control of the parties should be a Relief Event Only approved specified events should be listed Equally authorities are free to delete any item from this list if project specific circumstances merit although examples of this have been and are expected to remain extremely rare 32 The Authority should review the proposed Service Level Specification to clarify whether the SPV has any responsibility for ensuring the Facilities are compliant following future Changes in Law It may be appropriate if not to review this Clause 32 and Clause 29 Delay Events Where the SPV is taking residual value risk the drafting in Clause 32 should be reviewed on a project specific basis and agreed in conjunction wi
128. s entitled to use the Facilities during Core Times to the extent defined therein and during Additional Hours pursuant to Clause 22 13 The Authority must notify Sub hubco Project Co of any planned periods of Community Use and the Functional Area required for such use not less than one month before the commencement of each term Notification of terms 22 10 22 11 22 12 The terms for first Academic Year are No later than 31 December in each year the Authority must notify Sub hubco Project Co of the dates for terms including any half term holidays in the period kk August to Gi July following that notice Without prejudice to Clause 22 13 in the event that the Authority wishes either 24A 6 1 terms to have an aggregate yearly duration in excess of the number of School Days detailed in the Academic Year or 24A 6 2 to make a change to Core Times it must propose a change to the Service Level Specification in accordance with Schedule Part 16 Change Protocol The Authority is entitled without proposing a change to the Services Specification in accordance with Schedule Part 16 Change Protocol to make de minimis changes to the Core Times provided the total number of hours falling within Core Times remains the same unless Sub hubco Project Co can demonstrate to the Authority that such change will not have a de minimis impact on the cost of and or the delivery of the Services Additional Hours 22 13 Subj
129. s granted to give the Authority a claim as an unsecured creditor of the SPV and is not likely to result in any significant recovery for the Authority Where the Authority elects to pay in instalments interest shall be calculated on outstanding amounts at a rate between the gilt rate and the senior debt rate 17 Section 6 Adjusted Estimated Fair Value of the Agreement There will only be any Post Termination Service Amounts here to the extent that the Authority starts the retendering process but then decides to follow the non retendering approach These amounts are not deducted to the extent paragraph c of the definition of New Agreement is a period from the date of the New Contract to the original Expiry Date rather than the Termination Date to the original Expiry Date Adjusted Highest Compliant Tender Price Negative Post Termination Service Amounts PTSA represent an out of pocket cost to the Authority and will therefore need to be deducted from any payment of compensation due to the SPV Positive PTSA on the other hand are regarded as a form of prepayment the benefit of reduced service costs is also reflected in the tender price which is likely to be higher To avoid double counting any PTSA actually paid to the SPV need to be deducted from the tender price The effect of set off of negative PTSA under paragraph 3 8 of Section 2 Compensation for the SPV Default of Schedule Part 17 Compensation on Terminati
130. sfer of any person engaged or employed by Sub hubco Project Co or any relevant Service Provider in the provision of the Services on the expiry or termination of this Agreement Discretionary Benefits 26 18 Where Sub hubco Project Co or a relevant Service Provider is an Admission Body Project Co shall and or shall procure that any relevant Service Provider shall award benefits where permitted to the Pensionable Authority Employees under the LGPS Compensation Regulations and or the LGPS in circumstances where the Pensionable Authority Employees would have received such benefits had they still been employed by the Authority Page 70 of 9491 26 19 26 20 SCOTTISH FUTURES TRUST Where the award of benefits in Clause 26 18 is not permitted under the LGPS Compensation Regulations and or the LGPS or where Sub hubco Project Co and or a relevant Service Provider is not an Admission Body Sub hubco Project Co shall and or shall procure that any relevant Service Provider shall award benefits to the Pensionable Authority Employees which are no less favourable than the benefits the Pensionable Authority Employees would have received under the LGPS Compensation Regulations and or the LGPS in circumstances where the Pensionable Authority Employees would have received such benefits had they still been employed by the Authority Where under Clauses 26 18 and 26 19 such benefits are of a discretionary nature they shall be award
131. should contain Design and Construction Quality Plans 8 Review Procedure 8 Paragraph 1 2 1 The Authority should include any other items which are relevant on a project specific basis Paragraph 1 2 3 Table of Finishes This is project specific This table is intended to be for guidance only Paragraph 1 4 The Authority should refer to any other items which are relevant on a project specific basis Paragraph 3 This drafting has been included as a framework for guidance and should be amended as appropriate on a project specific basis including in particular to take account of how commissioning of the Facilities is to be carried out and any other matters that are to be left to be agreed pursuant to the Review Procedure such as 36 SCOTTISH FUTURES TRUST Schedule Comment Part proposals for self monitoring systems etc Paragraph 3 3 3 b Reference to NHS Requirements is relevant only where the Authority is a health board Other authorities should consider whether there are other requirements which are relevant here Paragraph 3 9 3 The Authority should consider as a technical matter the extent to which the terms of the Service Level Specification are sufficient to ensure that the Facilities will be maintained sensibly for example that material maintenance work is not being back ended with items of plant and equipment being made to operate beyond the design programmed life expectancy Parag
132. sions shall be deemed to be relevant discharge terms for the purposes of section 6 2 of the Local Government Contracts Act 1997 the Relevant Discharge Terms The parties acknowledge and agree that in the event that the circumstances envisaged by paragraph 1 2 occur prior to the circumstances envisaged by paragraph 1 1 then the amount calculated in accordance with Section 1 Compensation on Termination for Authority Default and Voluntary Termination of Schedule Part 17 Compensation on Termination shall be calculated to ensure no double counting between that amount and any sums paid to Sub hubco Project Co pursuant to paragraph 1 2 2 Page 82 of 9491 SCOTTISH FUTURES TRUST Form 12 Best Value 75 Best Value 75 1 75 2 Sub hubco Project Co shall take all reasonable steps necessary to facilitate support and assist the Authority in complying with Sections 1 and 2 of the Local Government in Scotland Act 2003 Subject to Clause 75 1 Sub hubco Project Co shall comply with the guidance referred to in Section 2 of the Local Government in Scotland Act 2003 as directed by the Authority from time to time Page 83 of 9491 SCOTTISH FUTURES TRUST Form 13 Payment of Compensation on Termination SECTION 5 GENERAL 1 PAYMENT AND INTEREST Following termination for Authority Default Force Majeure or Corrupt Gifts or Fraud or following No Retendering 1 1 1 2 Subject to paragraphs 1 2 and 1 6 below the
133. t basis Documents might include for example the appropriate sections of health and safety file as built drawings and maintenance manuals and results of technical commissioning 18 1 to 18 4 The Authority should consider what commissioning services start up activities will be carried out by the SPV and what commissioning activities will be carried out by the Authority during this period The Payment Mechanism and Service Level Specification may need to be structured so as to reflect the intention of the parties in relation to services start up during this period The standard Payment Mechanism does not envisage any structuring of this type and may therefore need to be adjusted in project specific cases It will depend on the significance of each party s activities during this period and will depend on how step up of payments during this period are structured If not relevant these Clauses may be deleted 18 5 To be amended on a project specific basis For example operational manuals may need to be made available at an earlier date depending on the timing of commissioning activities Further it may be possible for the SPV to provide draft manuals to the Authority for comment prior to finalisation and suitable amendments should be made to the Clause where relevant It is expected that substantially complete manuals will be available by the Actual Completion Date with final drafts 16 SCOTTISH FUTURES TRUST Clause
134. t in full and final settlement of all claims against the Fund in respect of each Transferring Member The payment of the Transfer Amount shall be satisfied by the transfer of readily marketable stocks and shares of the relevant Fund as agreed by the relevant Administering Authority and the trustees of the Broadly Comparable Scheme having a mid market value on the day before the Due Date equal to the Transfer Amount If the relevant Administering Authority and the trustees of the Broadly Comparable Page 76 of 9491 SCOTTISH FUTURES TRUST Scheme are not able to agree some or all of the particular assets to be transferred or the mid market value of any such assets the payment of the Transfer Amount or the appropriate part of it shall be satisfied by the relevant Fund transferring cash equal to of that part of the Transfer Amount in respect of which there has been no agreement as to the assets to be transferred 3 Past Service Benefits 3 1 Sub hubco Project Co shall procure that the Employer shall ensure that 3 1 1 the Broadly Comparable Scheme provides in respect of each Transferring Member such benefits as the Administering Authority s Actuary certifies to be of actuarially equivalent value in accordance with the Actuary s Letter 15 to the benefits which would have been payable under the LGPS in respect of the Transferring Members service before the Relevant Service Transfer Date if he had remained a member of the LGPS and
135. th SFT 32 3 Changes in Law relating to the extent of irrecoverable VAT are dealt with in Clause 35 VAT and Construction Industry Tax Deduction Scheme 32 4 3 The Authority has a say over the manner in which any Changes are implemented in accordance with the provisions of Schedule Part 16 and the SPV s grounds for objections to such changes are limited to the grounds referred to in Clause 32 4 3 i The financial consequences of such changes in law rest with the Authority including in relation to the cost of obtaining any necessary Consent The risks of obtaining the Consents remain with the SPV 34 If the Authority intends to make a capital contribution drafting should be added here Capital contributions must not exceed 49 of total cost for NPD projects and 45 for hub DBFM projects As capital contributions will always be project specific no standard drafting is provided Factors that are likely to need to be taken into account and provide for in the drafting include e ensuring that capital is reflected in value already delivered in the project 22 SCOTTISH FUTURES TRUST Clause Comment e implications for compensation on termination e VAT status especially if the capital contribution is funded by grant monies from a third party source 34 1 Practical completion of the Works triggers commencement of payment of the unitary charge Where phased completion is envisaged the p
136. the transfer The Authority shall have the right but not the obligation on any second or subsequent transfer to request the Government Actuary s Department to certify in respect of any new employer s pension scheme that the requirements of Clause 26 11 1 c to 26 11 1 e inclusive have been met Sub hubco Project Co shall procure that any new employer shall provide all such documentation as is required to enable the Government Actuary s Department to make the necessary assessment issues on Expiry or Termination Sub hubco Project Co shall and shall procure that any relevant Service Provider shall 26 17 1 maintain such documents and information as will be reasonably required to manage the pension aspects of any onward transfer of any person engaged or employed by Sub hubco Project Co or any relevant Service Provider in the provision of the Services on the expiry or termination of this Agreement including without limitation identification of the Pensionable Authority Employees 26 17 2 provide to the Authority such documents and information mentioned in Clause 26 17 1 which the Authority may reasonably request in advance of the expiry or termination of this Agreement and 26 17 3 fully co operate and procure that the trustees of the Broadly Comparably Scheme shall fully co operate with the reasonable requests of the Authority relating to any administrative tasks necessary to deal with the pension aspects of any onward tran
137. those parts of the Schedules to the Standard Project Agreements that contain stand alone contracts e g Funders Direct Agreement These should be removed as appropriate before the document is issued for a specific project SCOTTISH FUTURES TRUST Chapter 3 hub projects The hub DBFM version of the Standard Project Agreement is appropriate for use by hubcos Hub specific features The Authority s contracting counter party will be an SPV a wholly owned subsidiary of the hubco for the relevant territory referred to in the Standard Project Agreement as Sub hubco The Authority and other participants will have the option but no obligation under the hubco Shareholders Agreement to invest in the subordinated debt of the SPV Consistent with the Scottish Government s requirement that equity returns on revenue funded projects must be fixed or capped a mechanism has been provided Clauses 36 and 45 under which profits earned by the SPV that would otherwise be paid to the equity investors i e the holders of the SPV s shares and subordinated debt will be shared equally with the Authority once a minimum threshold level of equity return as fixed in the template DBFM Project Agreement within the Territory Partnering Agreement has been achieved If profits are such that the equity return would exceed a second threshold were all the profits to be distributed to equity all further profit distributions will be payable to the Authority
138. tional Areas have Core Times such as sports facilities at a school at weekends the SUR should be calculated using TAGSUF The SFT can supply a simple model to assist with this calculation It must remembered that SUR will need to be recalculated if there is a change to Core Times that affects the number of days on which only some Functional Areas have Core Times or the total GSUs of the Functional Areas on such days changes 14 Section 2 IF The indexation factor should reflect the proportion of the Annual Service Payment that represents the indexing SPV costs RPI and RPI The Authority should consider whether RPI is the most appropriate index to use Authorities may wish to consider the application of multipliers to Deductions 41 SCOTTISH FUTURES TRUST Schedule Comment Part affecting certain Functional Areas at certain times e g school halls during exam periods in which case the standard drafting will require to be amended 14 Section 4 The former NHS drafting on Temporary Alternative Accommodation has been omitted as unnecessary on the basis that any such arrangement is likely to be achieved through pragmatic negotiation at the time especially given the economic test in the Business Interruption insurance 14 Section 6 Paragraph 1 Delete this paragraph if the Authority procures Energy water and telecoms services in its own name Paragraph 2 To be decided by the Authority
139. to bring benefits into payment under the LGPS in accordance with regulation 19 of the Local Government Pension Scheme Benefits Membership and Page 71 of 9491 Adjustment Factor Administering Authority Admission Agreement Admission Body Broadly Comparable Scheme SCOTTISH FUTURES TRUST Contributions Scotland Regulations 2008 d any increases in the pay as defined in the Local Government Pension Scheme Benefits Membership and Contributions Scotland Regulations 2008 of Pensionable Authority Employees in excess of the rate of increases in pay assumed in the actuarial valuation prepared by the actuary in accordance with regulation 32 of the LGPS Administration Regulations immediately preceding such actual increases e any benefits which come into payment pursuant to regulation 20 ill health of the Local Government Pension Scheme Benefits Membership and Contributions Scotland Regulations 2008 and f any waiver of the requirement for any of the Pensionable Authority Employees to contribute to the LGPS provided always that should any of the events set out in the limbs a to f above be at the instigation of the Authority then that event shall not constitute an Additional Cost means any increase or decrease in Sub hubco s Project Co s or any relevant Service Provider s liability to contribute to the LGPS to a maximum increase or decrease over of or below o
140. tractor is responsible for increases that are due to its claims record or other factors for which it is primarily responsible The drafting concerning this is in Section 6 of Schedule Part 14 Payment Mechanism In an endeavour to ensure that the contractor seeks to obtain the best possible terms for the project insurances drafting has been provided in Section 4 of Schedule Part 15 Project Insurances 53 6 1 If insurers are unwilling to waive subrogation rights against unnamed Authority Parties the Authority should consider including specified named Authority Parties 26 SCOTTISH FUTURES TRUST Clause Comment especially sub contractors The Authority should however resist a suggestion that third parties should automatically be carved out from this Clause 53 6 2 This Clause may not be amended but an obligation may be put in Schedule Part 15 Insurance Requirements as follows The Insurers hereby waive all rights of subrogation however arising which they may have or acquire against the Authority Authority Parties and its or their respective parents affiliates directors officers employees and assigns arising out of any occurrence in respect of which any claim is admitted under this Policy except where the rights of subrogation or recourse are acquired in consequence of a Vitiating Act in which circumstance insurers may enforce such rights against the vitiating party notwithstanding the continuing
141. uestration or requisition of a material part of the Assets and or shares of Sub hubco Project Co or Hubco Hold Co by the Authority or any Relevant Authority or the Authority is sequestrated under the Bankruptcy Scotland Act 1985 or otherwise becomes insolvent and its obligations are not otherwise transferred to another party such as is referred to in Clause 57 4 Page 79 of 9491 SCOTTISH FUTURES TRUST Form 10 Authority rights to assign non NHS bodies 57 4 The Authority shall be entitled to assign transfer or dispose of the whole of this Agreement and or of any agreement entered into in connection with this Agreement to which the Authority and Sub hubco Project Co are both party 57 4 1 a Minister of the Crown including forthe avoidance of doubtor the Scottish Ministers 57 4 2 a local authority as defined in the Local Government Etc Scotland Act 1994 which has sufficient financial standing or financial resources to perform the obligations of the Authority under this Agreement and any other agreements to which such assignation transfer or disposal relates or 57 4 3 any other public body whose obligations under this Agreement and any other agreements to which such assignation transfer or disposal relates are unconditionally and irrevocably guaranteed by the Authority or a Minister of the Crown including for the aveidance_of deubtor the Scottish Ministers having the legal capacity power and autho
142. ust carry out an assessment taking account of actuarial advice of the level of financial risk arising on premature termination of the provision of the service or assets by reason of the insolvency winding up or liquidation of the transferee admission body and that where the level of risk identified by the assessment is such as to require it the transferee admission body must provide an indemnity or bond to meet the level of risk identified This clause seeks to mirror the right of set off which must be included in the Admission Agreement under regulation 5 7 of the LGPS Administration Regulations Page 66 of 9491 SCOTTISH FUTURES TRUST operation of Clause 34 2 1 c to reflect the Authority Top up Amount or the Sub hubco Project Co Top up Amount Debt arising as a result of cessation of participation in the LGPS 26 8 26 9 Where an Admission Agreement is terminated or otherwise ceases to have effect and Sub hubco Project Co and or any relevant Service Provider is required to pay an additional contribution to the LGPS pursuant to a rates and adjustments certificate issued under Regulation 34 of the LGPS Administration Regulations or otherwise the Exit Contribution Sub hubco Project Co and or any relevant Service Provider shall pass the account or invoice in relation to the Exit Contribution to the Authority within 20 Business Days of receipt of such account or invoice The Authority shall be responsible for paying an am
143. usted Highest Compliant Tender Price to dispute resolution pursuant to paragraph 3 11 of Section 2 Compensation for Sub hubco Default of this Schedule Part 17 the date on which the dispute is finally determined in accordance with Clause 56 Dispute Resolution Page 85 of 9491 1 7 1 8 1 9 SCOTTISH FUTURES TRUST provided that to avoid doubt if the dispute referred by Sub hubco Project Co to dispute resolution pursuant to paragraph 1 7 2 above concerns only a proportion of the Adjusted Highest Compliant Tender Price then the Authority shall pay the undisputed proportion of such sum no later than 20 Business Days after the date referred to in paragraph 1 7 1 above the Undisputed Payment Date and the Authority shall pay interest to Sub hubco Project Co on any amount of the Adjusted Highest Compliant Tender Price which has been withheld from the Undisputed Payment Date until the date on which payment is due under paragraph 1 7 2 above at the No Default Interest Rate If the Authority has received all bids from bidders under the Tender Process and has received a Compliant Tender but decides not to complete the Tender Process it shall notify Sub hubco Project Co of this decision and if the Adjusted Highest Compliant Tender Price is a positive number pay to Sub hubco Project Co an amount equal to the Adjusted Highest Compliant Tender Price within 20 Business Days of such notification If the Authority fails to pay
144. uthority s Actuary may require for the calculation of the Transfer Amount In respect of its own Transferring Members and shall warrant that this data is in all material respects true complete and accurate 2 4 The Authority shall use its reasonable endeavours to procure that 2 4 1 as soon as reasonably practicable after the Administering Authority s Actuary has been provided with the necessary data and information the Administering Authority s Actuary shall calculate the Transfer Amount in Page 75 of 9491 2 5 2 6 2 7 SCOTTISH FUTURES TRUST respect of its own Transferring Members in accordance with the Actuary s Letter and the LGPS Administration Regulations and 2 1 2 within one week of completing this calculation the Administering Authority s Actuary shall notify the Employer s Actuary in writing of the particulars of the calculation and the data on which the calculation is based The Employer s Actuary will then have one month or such longer period as the parties may agree from the date on which those particulars and data have been supplied to him in which to object in writing that the calculation is incorrect or not in accordance with the Actuary s Letter The calculation shall be final and binding on the parties if the Employer s Actuary raises no objection within this stated period If the Employers Actuary objects in writing under paragraph 3 4 and the Administering Authority s Actuary and the Employer
145. with respect to the shareholders in the SPV Equity IRR set out in the Base Case which excludes the effects of any anticipated refinancing 27 Relevant Discharge Terms 27 Relevant Discharge Terms for use where the Authority is a local authority are provided in Form 11 in Appendix 2 48 SCOTTISH FUTURES TRUST APPENDIX 2 Alternative Recommended Drafting Form No Title 1 School representative SS Asbestos 3 Planning Challenge 4 Unavailability of existing facilities 5 Community Benefits 6 Use of the Facilities 7 TUPE and employment matters no staff transfers 8 LGPS Pension provisions 9 Authority Events of Default for non NHS bodies 10 Authority rights to assign for non NHS bodies 11 Local Government Contracts Act 1997 and relevant discharge terms 12 Best Value 13 Payment of compensation on termination Page 49 of 9491 SCOTTISH FUTURES TRUST Form 1 School Representative 1 2 3 The head teacher of each School or such other member of staff of a School as the head teacher may notify in advance to Sub hubco Project Co from time to time shall undertake the role of a school representative the School Representative which School Representative shall provide a day to day contact with Sub hubco Project Co for the routine operation of this Agreement Unless pursuant to a specific delegation under Clause
146. y the Authority can obtain or Consents which the SPV can obtain only with input from the Authority appropriate drafting should be included in this Clause 11 and cross referred to in Clause 5 2 1 Acceptance of any such responsibility by the Authority should be narrowly prescribed A similar approach should be followed where there are legislative requirements in relation to the Facilities which can only be complied with by or that require the input or co operation of the Authority as occupier or user of the Facilities or any part of them Again acceptance of any such responsibility by the Authority should be narrowly prescribed 11 1 2 If the detailed planning permission includes conditions with which the Authority as owner occupier of the Facilities must comply appropriate drafting should be included in this Clause 11 and cross referred to in Clause 5 2 1 The costs associated with any planning agreements etc should be for the account of the SPV 11 3 to 11 11 Form 3 in Appendix 3 contains drafting that can be used where financial close is reached less than 12 weeks after detailed planning permission is granted In line with market practice this drafting places the risk of judicial review of the planning permission within that 12 week period with the Authority Thereafter judicial review risk transfers to the SPV The risk transferred to the Authority excludes any judicial review or challenge that arises from the SPV s conduct duri
147. yer for the purposes of this Section 4 LGPS Bulk Transfer Terms of Schedule Part 24 Employment and Pensions Fund means the Fund within the LGPS Transfer Amount means the amount or amounts referred to in paragraph 3 1 Page 74 of 9491 SCOTTISH FUTURES TRUST Transferring Member means an Pensionable Authority Employee who agrees to a transfer of benefits being made for him or her from the relevant Fund to the Broadly Comparable Scheme under paragraph 2 In this Section 4 LGPS Bulk Transfer Terms of Schedule Part 24 Employment and Pensions other defined terms shall unless the context otherwise requires have the meanings given to them in Schedule Part 1 Definitions and Interpretation 1 The Broadly Comparable Scheme Sub hubco Project Co shall procure that the Employer shall invite each Pensionable Authority Employee who joins the Broadly Comparable Scheme in accordance with Clause 26 11 1 to consent to a transfer of benefits being made for him from the relevant Fund to the Broadly Comparable Scheme The Employer must issue this invitation no later than one month after the Relevant Service Transfer Date The invitation must be in a form that is acceptable to the Authority and the Administering Authority Such acceptance not to be unreasonably withheld or delayed by the Authority and that complies with any requirements of the LGPS Administration Regulations Any Pensionable Authority Employee wishing to consent to a
148. yments and interest payable under the LGPS Administration Regulations due from Sub hubco Project Co or from any relevant Service Provider as applicable under the Admission Agreement Liabilities of the Parties and Payments relating to Pensions 26 7 The following provisions shall apply in relation to liability and payments as between the parties in relation to the provisions of this Clause 26 Pension Matters 26 7 1 immediately on a liability to contribute under a rates and adjustments certificate under Regulations 32 or 34 of the LGPS Administration Regulations arising on Sub hubco Project Co and or any relevant Service Provider Sub hubco Project Co and or any relevant Service Provider shall notify the Authority in writing of the Actual Contribution Amount set out in that rates and adjustments certificate and either i the amount if any by which the Actual Contribution Amount exceeds the Fixed Amount the Authority Top up Amount or ii the amount if any by which the Actual Contribution Amount is less than the Fixed Amount the Sub hubco Project Co Top up Amount and 26 7 2 following such written notification to the Authority by Sub hubco Project Co pursuant to Clause 26 7 1 above the Annual Service Payments shall be adjusted by 10 The Authority may also be the Administering Authority Under Regulation 5 5 a of the LGPS Administration Regulations the Local Authority in the majority of cases m

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