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PfS Derogations Process – Instructions for Bidders and Local

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					                PfS Derogations Process:
         Instructions for Local Authorities
                and Bidders during the
                          Initial Procurement


Note: This guidance is applicable to initial BSF procurements by Local
Authorities. Please refer to the separate guidance in respect of approval of
Derogations as part of the New Project Approval Procedure for New Projects
under the Strategic Partnering Agreement. This guidance applies from the date
of publication however, for those projects where any of the following
milestones are due in the four weeks following the last date of publication of
this guidance, the current derogations forms can continue to be used:

      OBC submission

      Initial Bid Submission

      Close of Dialogue

      Final Bid Submission

      Final Business Case Submission

      Financial Close.




                                 Page 1 of 46
  PfS and its advisers accept no liability whatsoever for any expense, liability, loss,
       claim or proceedings arising from reliance placed upon this Guidance.

This guidance will be reviewed. The next review date will be 12 months after the date
                                   of publication.




                                      Page 2 of 46
Document Properties
Document Owner                           Commercial Director

Organisation                             Partnerships for Schools

Title                                    BSF Guidance Note: PfS Derogations Process:
                                         Instructions for Local Authorities and Bidders
                                         during the Initial Procurement




Version History
Date                  Version   Status         Comments

19 January 2009       1.0       Issued         Date of first publication.




                                         Page 3 of 46
PfS Derogations Process – Instructions for Local Authorities and Bidders

Contents                                                       Page

Introduction                                                   6

Procurement Template Documents                                 7

Template Documents                                             8

Academies Development Agreement                                8

Versions of Standard Form Documents                            8

General Approach to Derogations                                8

SoPC Derogations                                               9

Versions of Derogations Forms                                  9

OBC Version Derogations Form                                   10

Dialogue Derogations Form                                      11

Close of Dialogue Derogations Form                             14

Final Bid Derogations Form                                     15

Financial Close Derogations Form                               16

Appendix 1 – OBC Version Derogations Form                      18

Appendix 2 – Dialogue Derogations Form                         19

Appendix 3 – Close of Dialogue Derogations Form                21

Appendix 4 – Final Bid Derogations Form                        23

Appendix 5 – Financial Close Derogations Forms

Part 1 – Shareholders’ Agreement                               25

Part 2 – Strategic Partnering Agreement                        27

Part 3 – PFI Project Agreement                                 29

Part 4 – PFI Payment Mechanism                                 30

Part 5 – Funder’s Direct Agreement                             31

Part 6 – Management Services Agreement                         35

Part 7 – ICT Services Contract                                 36




                                   Page 4 of 46
Part 8 – ICT Payment Mechanism                          38

Part 9 – Design & Build Contract Lump Sum/Target Cost   40

Appendix 6 – Exceptional Derogation Request Form        43

Appendix 7 – PUK derogations table                      44




                                 Page 5 of 46
INTRODUCTION

Partnerships for Schools (PfS) is the Non-Departmental Public Body (NDPB)
responsible for the management of the Building Schools for the Future (BSF)
programme. As part of this role PfS has produced standard documentation
comprising Standard Form Agreements and Procurement Template Documentation
which must be used to procure a BSF project.

For the purposes of this document the term “Derogation” with reference to PfS
Standard Form Documents means any amendment, however minor, to the drafting of
the Standard Form Documentation.

PfS approval of all Procurement Template Documentation is required for
approval of a Local Authority’s Outline Business Case.

PfS approval of all Derogations to Standard Form Agreements is required for
approval of a Local Authority’s Outline Business Case, Close of Dialogue and
Final Business Case. Only Derogations explicitly included in the relevant
Derogations Form for each stage will be considered by PfS. No Derogation is
considered approved unless it is included in the appropriate Derogations Form
and has been specifically identified in that Derogations Form by PfS as having
been approved by PfS. Please note that Derogations can only be approved by
the PfS Commercial Manager appointed for the project in question (or an
Assistant Commercial Director or the Commercial Director).

The suite of Standard Form Documents for which PfS approval is required consists of
the following documents:

Procurement Template Documentation*

    1. OJEU Contract Notice (November 2008)

    2. Pre-Qualification Questionnaire

    3. Pre-Qualification Evaluation Matrix

    4. Descriptive Document

    5. Invitation to Participate in Dialogue Volume 1 (IPD)

    6. Invitation to Submit Final Bids




*
 The documents listed at 1 – 6 are the procurement documents for use by local authorities in
Wave 5 onwards. For Wave 1 – 4 local authorities, the Procurement Template Documentation
consists of the following documents to which the same requirements apply:
   1. OJEU Contract Notice (April 2006)
   2. Memorandum of Information
   3. PQQ Information and Instructions
   4. PQQ Information Required from Bidders
   5. PQQ Scoring Matrix
   6. Invitation to Participate In Dialogue (ITPD) (March 2006)
   7. Descriptive Document (ITPD stage) (March 2006)
   8. ITPD Scoring Matrix
   9. Invitation to Continue Dialogue (ITCD).


                                       Page 6 of 46
The Procurement Template Documents are templates, and so specific Derogations
Tables are not required for approval of these; please see below for further details on
the approval process for the Procurement Template Documentation.

Standard Form Agreements

   7. Shareholders’ Agreement

   8. Strategic Partnering Agreement

   9. PFI Project Agreement

   10. PFI Payment Mechanism

   11. Funder’s Direct Agreement

   12. Management Services Agreement

   13. ICT Services Contract

   14. ICT Payment Mechanism

   15. Design & Build Contract Lump Sum Option

   16. Design & Build Contract Target Cost Option

   17. Academy Development Agreement (where being procured through the LEP).

Derogations to any of these Standard Form Agreements must be approved by PfS. A
separate Derogations Form will be required for each document (including separate
forms for each payment mechanism) at each stage of the procurement and New
Project Approval Process under schedule 3 of the Strategic Partnering Agreement.
Different versions of the Derogations Forms are required at different stages of the
procurement; details of the forms to be used at various stages in the procurement are
set out below.

PfS will respond to Derogations Forms within 10 Business Days of receipt of a
correctly and comprehensively completed Derogations Form. Although PfS will work
closely with Local Authorities and Bidders throughout the procurement process, it is
always advisable to submit Derogations Forms more than 10 working days before
you wish to complete a relevant stage to allow time to deal with any issues which
arise out of the Derogations Forms. Further details on the timing of submission of
Derogations Forms at specific stages of the procurement process are given below.

PROCUREMENT TEMPLATE DOCUMENTS

As stated above, the Procurement Template Documents are Standard Form
Documents, and as such PfS do not expect the Procurement Template Documents to
be altered to be altered other than where indicated in the documents by the use of
square brackets and footnotes. There are, however, many areas where project
specific information and narrative needs to be included by the Local Authority. It is
therefore not necessary for Derogations Forms to be completed for the Procurement
Template Documents listed at 1 – 6 above. The Procurement Template Documents
should nevertheless be developed with PfS and marked-up versions (showing
changes against the relevant PfS Procurement Template Document) should be



                                     Page 7 of 46
submitted for review as part of the Local Authority’s OBC submission. These will be
reviewed by PfS in the same timescale as the overall OBC review. The ITSFB should
be submitted for review at least 3 weeks prior to programmed Close of Dialogue.

Please note that Volume 2 of the IPD consists of the Standard Form Agreements for
which Derogations Forms must be completed as set out below.

TEMPLATE DOCUMENTS

PfS has also produced Template Documents (other than Procurement Template
Documents) e.g. Governing Body Agreements, for use with the Standard Form
Documents. Although PfS expects these documents to be used they have been
produced to assist Local Authorities and other stakeholders. As these are not
Standard Form Documents, changes to these Template Documents are not
considered to be Derogations and PfS approval of amendments is not required,
however any changes should be discussed with PfS so that they meet current
requirements.

ACADEMIES DEVELOPMENT AGREEMENT

The Academies Development Agreement is a Standard Form Agreement and
Derogations must be submitted by the Local Authority to PfS in respect of this
Agreement where any amendments are contemplated.

VERSIONS OF STANDARD FORM DOCUMENTS

From time to time PfS will produce revised versions of the Standard Form
Documents, for example in response to legislative or policy changes. The current
versions of the Standard Form Documents are available on the PfS website at
www.partnershipsforschools.org.uk. Each Standard Form Document states in the
introductory statement at the beginning of the document the date from which it must
be used for initial LEP procurements. Please refer to the separate guidance in
respect of approval of Derogations as part of the New Project Approval Procedure for
New Projects under the Strategic Partnering Agreement to be published on the PfS
website.

GENERAL APPROACH TO DEROGATIONS

The Standard Form Agreements indicate by the use of square brackets and
footnotes where information specific to the project should be inserted or where
alternative drafting is permitted. PfS considers that such changes constitute
Derogations and will still need to approve such insertions or amendments but it is
acknowledged that amendments may be appropriate in these areas. In some cases
alternative drafting is permitted only where value for money benefits can be
demonstrated. Where this applies, the value for money benefits must be articulated
in order for the Derogation to be accepted.

In addition, some drafting in the Standard Form Agreements is specifically identified
as being a template which should be amended to deal with the specifics of the
project, e.g. the Decant Protocol contained in the PFI Project Agreement and the
Design & Build Contracts. Where drafting is specifically identified as a template in
this manner, changes to this drafting are not considered to be Derogations and PfS
approval of amendments is not required but such amendments will be reviewed for
consistency.




                                    Page 8 of 46
Other than as set out above, PfS requires that each of the Standard Form
Agreements is used without amendment save for those which are genuinely project
specific changes supported by strong project specific reasoning. In particular, PfS will
not approve clarificatory amendments save where, exceptionally, an error is identified
in the Standard Form Agreements which prevents the contract operating in the
manner intended. Bidders should note that any proposed amendments to a BSF
Standard Form Agreement which affect the risk profile of project may impact
negatively on the evaluation of their Bid, not simply in respect of the evaluation score
awarded for the Financial and Commercial section, but also, where appropriate,
where the amendment evidences for example the Bidder’s approach to partnering or
service provision.

Where any Derogation to the Standard Form Agreements is proposed either by a
Local Authority or a Bidder, PfS approval of the Derogation must be sought using the
version of Derogations Form appropriate to the stage of the project. Please note
below the restrictions on the classes of Derogations PfS will consider at different
stages of the project. Details of the different versions of the Derogations Forms and
restrictions on what Derogations will be considered at different stages are set out
below.

SOPC DEROGATIONS

Some of the drafting in the Standard Form PFI Project Agreement and Funder’s
Direct Agreement is HMT SoPC drafting. Where changes are made to this drafting,
Partnerships UK (PUK) and Treasury (HMT) approval will also be required.

SoPC derogations must be specifically identified by the Local Authority in a separate
PUK derogations table (included at Appendix 7) as well as being included in the
relevant version of the Derogations Form, and submitted to PfS. PfS will also require
confirmation from Local Authorities’ legal advisers that all SoPC derogations have
been identified and included in the PUK derogations tables.

PfS will liaise with PUK and HMT in respect of all SoPC derogations. All such SoPC
derogations must be submitted for approval five weeks prior to Close of Dialogue.
Local Authorities and Bidders should note that the dialogue cannot be closed
until all derogations to SoPC have been approved by PfS, PUK and HMT.

VERSIONS OF DEROGATIONS FORMS

Different versions of the Derogations Forms must be used at various stages of the
Initial Procurement as follows:

   1. OBC Derogations Form

   2. Dialogue Derogations Form

   3. Close of Dialogue Derogations Form

   4. Final Bid Derogations Form

   5. Financial Close Derogations Form

   6. Exceptional Derogation Request Form




                                     Page 9 of 46
Each version of the Derogations Form is appended to this document and sets out the
information required from the relevant party for completion of the document. In
addition, the PUK derogations table must also be submitted prior to Close of
Dialogue as detailed above and below. Further information as to the use of each
version of the Derogations Forms is set out below.

OBC DEROGATIONS FORM

The OBC Derogations Form is included at Appendix 1.

One of the requirements of OBC approval is PfS approval to the procurement
documentation for the project. This consists of the Procurement Template
Documents (see above) and also Volume 2 of the IPD which consists of the following
Standard Form Agreements for each of which an OBC Version Derogations Form
must be completed and submitted by the Local Authority for PfS approval as part of
its OBC submission.:

   1. Shareholders’ Agreement

   2. Strategic Partnering Agreement

   3. PFI Project Agreement

   4. PFI Payment Mechanism

   5. Funder’s Direct Agreement

   6. Management Services Agreement

   7. ICT Services Contract

   8. ICT Payment Mechanism

   9. Design & Build Contract Lump Sum Option

   10. Design & Build Contract Target Cost Option

Where no Derogations are requested in respect of any of these Standard Form
Agreements, a Derogation Form for that document should be submitted clearly
stating no Derogations are requested.

Instructions on completing the OBC Derogations Form

This form should be completed by the Local Authority and submitted to PfS for
approval. Please ensure the information requested in the footer is completed.
Drafting and comments inserted into the form should be preceded by the name of the
relevant party and the date inserted.

For each Derogation requested the form must include:

             the amended drafting of the Derogation requested clearly showing
              what changes have been made to the relevant Standard Form
              Document;
             the intent of and the justification for the amendment; and




                                  Page 10 of 46
              any comments from PfS in respect of the Derogation in a previous
               iteration of the Derogations Form,

where this information is not included the Derogation will not be considered and will
be automatically rejected. A redline version of the relevant Standard Form
Agreement showing all Derogations requested should also be submitted with the
Derogations Form.

The Derogations Form should be updated at each iteration (including the Version
Number and Submission Date) to ensure that a complete record of Derogations is
maintained. Derogations which have been agreed or dropped should be clearly
identifiable from the form as should any new Derogations requested since the
previous iteration, any changes to Derogations previously submitted and any
comments by PfS contained in previous iterations. PfS will not consider further
requests for derogations until it has responded on the last iteration of the Derogations
Form submitted but should be notified immediately where any Derogations currently
under consideration have been dropped.

Derogations must not be grouped or bundled together save for “global” changes (e.g.
changes from plural to singular for a single school PFI). “Global” changes should be
highlighted as a single item in the derogations table. Deletions of (but not
amendments to) footnotes contained in the Standard Form Agreements are not
considered Derogations and should not be included in the Derogations Form. Other
than “global” changes and deletion of footnotes, each individual Derogation must be
listed separately. Any Derogations not listed in this manner will not be considered
and may result in a delay to the next project milestone.

The OBC Derogations Form contains two tables, firstly requiring project information
and secondly information in respect of any Derogations requested.

Please insert Derogations requests in the following order:
    any amendments to parties (where applicable)
    any amendments to the recitals (where applicable)
    any amendments to definitions (please note these are contained in clause 1.1
       of each agreement (or paragraph 1.1 of Schedule 1 of the Strategic
       Partnering Agreement or Shareholders’ Agreement)
    any amendments to the drafting of the main body
    any amendments to the schedules, in order.

Please do not include PFI Payment Mechanism and ICT Payment Mechanism in the
Derogations Forms as schedules to the PFI Project Agreement and ICT Services
Contract; instead, separate Derogations Forms should be submitted for each of these
inserted in the order of the Parts.

DIALOGUE DEROGATIONS FORM

The Dialogue Derogations Form is included at Appendix 2.

Dialogue Derogations Forms should initially be populated by the Bidder and
submitted to the Local Authority for consideration. The Local Authority should then
complete the Derogations Form and submit it to PfS for approval. Although PfS will
work closely with Local Authorities and Bidders throughout the procurement process,
as a minimum, the Derogations Forms should be submitted at least three weeks prior
to each stage in the dialogue (e.g. evaluation of Initial Bids, Readiness to Close



                                     Page 11 of 46
Dialogue Meeting) to ensure that there is sufficient time to deal with any queries
arising taking into account the 10 working days turnaround time for Derogations
Forms. Please also see above in respect of derogations from SoPC; PUK
derogations tables must be submitted to PfS 5 weeks prior to Close of
Dialogue.

A Dialogue Derogations Form must be completed and submitted in respect of each of
the following Standard Form Agreements:

              1. Shareholders’ Agreement

              2. Strategic Partnering Agreement

              3. PFI Project Agreement

              4. PFI Payment Mechanism

              5. Funder’s Direct Agreement

              6. Management Services Agreement

              7. ICT Services Contract

              8. ICT Payment Mechanism

              9. Design & Build Contract Lump Sum Option

              10. Design & Build Contract Target Cost Option

Where no Derogations are requested in respect of any of these Standard Form
Agreements, a Derogation Form for that document should be submitted clearly
stating no Derogations are requested.

Where a Bidder or Local Authority has made any pricing, technical or other
assumptions and an amendment would need to be made to a Standard Form
Agreement for such assumption to have effect, any such amendment must be agreed
and approved as a Derogation prior to close of dialogue as PfS cannot approve any
Derogations arising from such assumptions once the dialogue has closed.

Before Close of Dialogue, the Local Authority must have agreed with each Bidder a
position on each of the Standard Form Agreements listed above and all Derogations
must have been approved by PfS and PUK where appropriate (see above). The final
version of the Dialogue Derogations Table should include all Derogations requested
by the Bidder or Local Authority and for each Derogation should identify whether it
has been dropped or agreed between the Bidder and the Local Authority and
approved by PfS. PfS will not agree to Close of Dialogue until all Derogations
have been approved and there are no caveats contained in the Derogations
Table e.g. that a Bidder or the Local Authority is considering a position or
wishes to discuss it further. Please also note that the Local Authority will be
required to disclose to PfS any side letters as a condition of the promissory note and
these must have been agreed with PfS. The final version of the Dialogue Derogations
Form will then form the basis of the Close of Dialogue Derogations Form. Local
Authorities and Bidders should note that PfS cannot consider any further
Derogations, whether proposed by the Local Authority or the Bidder, once the
dialogue has closed save for:



                                    Page 12 of 46
      the gaps specifically identified in the PfS Financial Close Derogations
       Form for each Standard Form Agreement included at Appendix 5; and

      those which arise from an unforeseen change in circumstances which it
       was not possible to anticipate during the dialogue (please note that this
       exception must not be used to defer finalising issues which are capable
       of being finalised during the dialogue).

Instructions on completing the Dialogue Derogations Form

Bidders should initially complete the form other than the “Local Authority Comment”
and “PfS Response” columns. Please ensure the information requested in the footer
is completed. Drafting and comments inserted into the form should be preceded by
the name of the relevant party and the date inserted.

For each Derogation requested the Bidder must include:

              the amended drafting of the Derogation requested clearly showing
               what changes have been made to the relevant Standard Form
               Document; and
              the intent of and the justification for the amendment,

where this information is not included the Derogation will not be considered and will
be automatically rejected. Cross references to consequential amendments are not
acceptable and must be specifically identified as a separate Derogation. A redline
version of the relevant Standard Form Agreement showing all Derogations requested
should also be submitted with the Derogations Form.

For each Derogation requested by a Bidder the Local Authority must complete the
Local Authority comments table. Where the Local Authority is considering accepting
a Derogation this must clearly set out why this is the case including an analysis of the
impact on the Standard Form Document of the proposed Derogation; this should
include as applicable a value for money analysis, risk mitigation proposals and/or an
explanation of why the Local Authority agrees a Derogation is necessary. If this
information is not included the Derogation will be rejected by PfS. Drafting and
comments inserted into the form should be preceded by the name of the relevant
party and the date inserted.

The Derogations Form should be updated at each iteration (including the Version
Number and Submission Date) to ensure that a complete record of Derogations is
maintained. Derogations which have been agreed or dropped should be clearly
identifiable from the form as should any new Derogations requested since the
previous iteration, any changes to Derogations previously submitted and any
comments by PfS contained in previous iterations. PfS will not consider further
requests for derogations until it has responded on the last iteration of the Derogations
Form submitted but should be notified immediately where any Derogations currently
under consideration have been dropped by the parties.

Derogations must not be grouped or bundled together save for “global” changes (e.g.
changes from plural to singular for a single school PFI). “Global” changes should be
highlighted as a single item in the derogations table. Deletions of (but not
amendments to) footnotes contained in the Standard Form Agreements are not
considered Derogations and should not be included in the Derogations Form. Other
than “global” changes and deletion of footnotes, each individual Derogation must be



                                     Page 13 of 46
listed separately. Any Derogations not listed in this manner will not be considered
and may result in a delay to the next project milestone.

The Dialogue Derogations Form contains two tables, firstly requiring project
information and secondly information in respect of any Derogations requested.

Please insert Derogations requests in the following order:
    any amendments to parties (where applicable)
    any amendments to the recitals (where applicable)
    any amendments to definitions (please note these are contained in clause 1.1
       of each agreement (or paragraph 1.1 of Schedule 1 of the Strategic
       Partnering Agreement or Shareholders’ Agreement)
    any amendments to the drafting of the main body
    any amendments to the schedules, in order.

Please do not include PFI Payment Mechanism and ICT Payment Mechanism in the
Derogations Forms as schedules to the PFI Project Agreement and ICT Services
Contract; instead, separate Derogations Forms should be submitted for each of these
inserted in the order of the Parts.

CLOSE OF DIALOGUE DEROGATIONS FORM

The Close of Dialogue Derogations Form is included at Appendix 3.

Local Authorities and Bidders should note that PfS cannot consider any further
Derogations, whether proposed by the Local Authority or the Bidder, once the
dialogue has closed save for:

      the gaps specifically identified in the PfS Financial Close Derogations
       Form for each Standard Form Agreement included at Appendix 5; and

      those which arise from an unforeseen change in circumstances which it
       was not possible to anticipate during the dialogue (please note that this
       exception must not be used to defer finalising issues which are capable
       of being finalised during the dialogue).

A Close of Dialogue Derogations Form must be completed and submitted in respect
of each of the following Standard Form Agreements:

              1. Shareholders’ Agreement

              2. Strategic Partnering Agreement

              3. PFI Project Agreement

              4. PFI Payment Mechanism

              5. Funder’s Direct Agreement

              6. Management Services Agreement

              7. ICT Services Contract

              8. ICT Payment Mechanism




                                   Page 14 of 46
               9. Design & Build Contract Lump Sum Option

               10. Design & Build Contract Target Cost Option

For each Bidder the Close of Dialogue Derogations Form should include all
Derogations contained in the final version of the Dialogue Derogations Table which
have been agreed between the Bidder and the Local Authority and which have been
approved by PfS. The Local Authority must submit the completed form to PfS as
part of PfS’s formal approval to Close of Dialogue, along with the final versions of the
PUK derogations tables where applicable. Where no Derogations are requested in
respect of any of these Standard Form Agreements, a Close of Dialogue Derogations
Form for that document should be submitted clearly stating no Derogations are
sought. PUK derogations tables should be submitted to PfS five weeks prior to Close
of Dialogue. Derogations Forms in respect of each Standard Form Agreement should
be submitted to PfS three weeks prior to Close of Dialogue to ensure that there is
sufficient time to deal with any queries arising taking into account the 10 working
days turnaround time for Derogations Forms.

Instructions on completing the Close of Dialogue Derogations Form

The Close of Dialogue Derogations Form should lift the agreed and approved
Derogations from the final version of the Dialogue Derogations Form, including the
drafting, justification and Local Authority comments. In addition, the Close of
Dialogue Derogations Form requires:

   a) identification of whether the particular derogation was requested by the
      Bidder or by the Local Authority. Please insert here “LA” if the Derogation in
      question was requested by the Local Authority and “B” if requested by the
      Bidder; and
   b) the stage at which the Derogation was approved (OBC or Dialogue). Please
      insert here “OBC” where the Derogation was approved as part of the OBC
      and “D” if the Derogation was approved during the dialogue.

A redline version of the relevant Standard Form Agreement showing all agreed and
approved Derogations should also be submitted with the Derogations Form.

FINAL BID DEROGATIONS FORM

The Final Bid Derogations Form is included at Appendix 4.

PfS expects that the content of the Close of Dialogue Derogations Form will be
submitted by each Bidder as its Final Bid Submission in response to the ITSFB.
Where this is the case, Bidders should make the following changes to the agreed
Close of Dialogue Derogations Form:

      Change the title on the form from “Close of Dialogue Derogations Form” to
       “Final Bids Derogations Form”
      replace “Version No” with “Final Bid Submission Date” in the first table and
       insert the relevant date
      in the footer, change “Close of Dialogue Derogations Form” to “Final Bids
       Derogations Form”

If the approach described above is not adopted, the template for a Final Bid
Derogations Form is included at Appendix 4. Although Bidders may require further
amendments as part of their Final Bid Submission, PfS cannot consider these. This


                                     Page 15 of 46
may jeopardise the approval of a Local Authority’s FBC and may therefore be taken
into account by Local Authorities as part of their evaluation process as substantially
impacting upon the deliverability of their project. Similarly, PfS cannot consider any
requests for further Derogations from Local Authorities at this stage other than as set
out in the following paragraph.

Local Authorities and Bidders should note that PfS cannot consider any further
Derogations, whether proposed by the Local Authority or the Bidder, once the
dialogue has closed save for:

      the gaps specifically identified in the PfS Financial Close Derogations
       Form for each Standard Form Agreement included at Appendix 5; and

      those which arise from an unforeseen change in circumstances which it
       was not possible to anticipate during the dialogue (please note that this
       exception must not be used to defer finalising issues which are capable
       of being finalised during the dialogue).

A Final Bids Derogations Form must be completed and submitted in respect of each
of the following Standard Form Agreements:

               1. Shareholders’ Agreement

               2. Strategic Partnering Agreement

               3. PFI Project Agreement

               4. PFI Payment Mechanism

               5. Funder’s Direct Agreement

               6. Management Services Agreement

               7. ICT Services Contract

               8. ICT Payment Mechanism

               9. Design & Build Contract Lump Sum Option

               10. Design & Build Contract Target Cost Option

Instructions on completing the Final Bid Derogations Form

Where a Bidder intends to submit the Close of Dialogue Derogations Form as its
Final Bid Submission, Bidders should make the changes to the agreed Close of
Dialogue Derogations Form as described above.

The Final Bid Derogations Forms should be submitted to PfS for information
purposes but please note that PfS will not consider new Derogations at this stage.

FINANCIAL CLOSE DEROGATIONS FORM

The PfS Financial Close Derogations Form for each Standard Form Document is
included at Appendix 5. PfS can only consider the Derogations identified in these
forms at financial close stage unless further Derogations arise from a change in



                                    Page 16 of 46
circumstances which it was not possible to deal with or anticipate during the dialogue
(please note that this exception must not be used to defer finalising issues which are
capable of being finalised during the dialogue). Where such Derogations arise the
Local Authority must submit an Exceptional Derogation Request Form in respect of
each such Derogation.

A Financial Close Derogations Form must be completed and submitted in respect of
each of the following Standard Form Agreements:

              1. Shareholders’ Agreement

              2. Strategic Partnering Agreement

              3. PFI Project Agreement

              4. PFI Payment Mechanism

              5. Funder’s Direct Agreement

              6. Management Services Agreement

              7. ICT Services Contract

              8. ICT Payment Mechanism

              9. Design & Build Contract Lump Sum Option

              10. Design & Build Contract Target Cost Option


Instructions on completing the Financial Close Derogations Form

Local Authorities should agree the drafting to be included in final version of each
Standard Form Agreement in respect of each Derogation identified in the Financial
Close Derogations Forms and submit these for PfS approval. Information and
comments inserted into the form should be preceded by the name of the relevant
party and the date inserted. The Final Bid Form for the Selected Bidder for each
Standard Form Agreement along with the Financial Close Derogations Form for that
document should be submitted as part of the Local Authority’s Final Business Case
Submission for approval by PfS.

Where, exceptionally, a Derogation is required which is not already contained in
either the relevant Close of Dialogue Derogations Form or PfS Financial Close
Derogations Form and which arises from a change in circumstances which could not
have been dealt with or anticipated during the dialogue, Local Authorities should
submit a comprehensively completed Exceptional Derogation Request Form
(included at Appendix 6) in respect of the Derogation for consideration by PfS. PfS
will only approve such Derogations in exceptional circumstances.

If you have any queries on the Derogations Process please contact the PfS
Commercial Manager allocated to the project in respect of which your query arises.




                                    Page 17 of 46
                                                                   Appendix 1

                               [insert name of LA] [insert name of document]: OBC Derogations Form

PfS approval of all Derogations to Standard Form Agreements is required for approval of a Local Authority’s Outline Business Case,
Close of Dialogue and Final Business Case. Only Derogations explicitly included in the relevant Derogations Form for each stage will
be considered by PfS. No Derogation is considered approved unless it is included in the appropriate Derogations Form and has been
specifically identified in that Derogations Form by PfS as having been approved by PfS. Please note that Derogations can only be
approved by the PfS Commercial Manager appointed for the project in question (or an Assistant Commercial Director or the
Commercial Director). Please refer to the PfS Guidance document “PfS Derogations Process – Instructions for Local Authorities and
Bidders” for information and instructions on completion of Derogation Forms.

Local Authority                                                           Submission Date

Version Number                                                            Local Authority Legal Advisers

Local Authority Financial                                                 Local Authority Insurance
Advisers                                                                  Advisers


   Reference                  Proposed Amendment                                   Justification              PfS Response




[insert: Local Authority name; BSF Standard Document; Version No;] OBC Derogations Form
                                                                    Page 18 of 46
                                                                    Appendix 2

                                              [insert name of LA] [insert name of document]
                                           [insert name of Bidder]: Dialogue Derogations Form

PfS approval of all Derogations to Standard Form Agreements is required for approval of a Local Authority’s Outline Business Case,
Close of Dialogue and Final Business Case. Only Derogations explicitly included in the relevant Derogations Form for each stage will
be considered by PfS. No Derogation is considered approved unless it is included in the appropriate Derogations Form and has been
specifically identified in that Derogations Form by PfS as having been approved by PfS. Please note that Derogations can only be
approved by the PfS Commercial Manager appointed for the project in question (or an Assistant Commercial Director or the
Commercial Director). Please refer to the PfS Guidance document “PfS Derogations Process – Instructions for Local Authorities and
Bidders” for information and instructions on completion of Derogation Forms. Comments should be preceded by each party’s name
and the date.

Local Authority                                                             Bidder

Funder                                                                      Submission Date

Version Number                                                              Local Authority Legal Advisers

Local Authority Financial                                                   Local Authority Insurance
Advisers                                                                    Advisers

Bidder Legal Advisers                                                       Bidder Financial Advisers

Bidder Insurance Advisers                                                   Funder Legal Advisers

Funder Financial Advisers                                                   Funder Insurance Advisers




[insert: Local Authority name; BSF Standard Document; Bidder; Version No;] Dialogue Derogations Form
                                                                     Page 19 of 46
   Reference           Proposed Amendment                    Justification             Local Authority Comment   PfS Response




[insert: Local Authority name; BSF Standard Document; Bidder; Version No;] Dialogue Derogations Form
                                                                     Page 20 of 46
                                                                    Appendix 3

                                              [insert name of LA] [insert name of document]
                                      [insert name of Bidder]: Close of Dialogue Derogations Form

PfS approval of all Derogations to Standard Form Agreements is required for approval of a Local Authority’s Outline Business Case,
Close of Dialogue and Final Business Case. Only Derogations explicitly included in the relevant Derogations Form for each stage will
be considered by PfS. No Derogation is considered approved unless it is included in the appropriate Derogations Form and has been
specifically identified in that Derogations Form by PfS as having been approved by PfS. Please note that Derogations can only be
approved by the PfS Commercial Manager appointed for the project in question (or an Assistant Commercial Director or the
Commercial Director). Please refer to the PfS Guidance document “PfS Derogations Process – Instructions for Local Authorities and
Bidders” for information and instructions on completion of Derogation Forms.

Local Authority                                                             Bidder

Funder                                                                      Submission Date

                                                                            Local Authority Financial
Local Authority Legal Advisers
                                                                            Advisers
Local Authority Insurance
                                                                            Bidder Legal Advisers
Advisers

Bidder Financial Advisers                                                   Bidder Insurance Advisers

Funder Legal Advisers                                                       Funder Financial Advisers

Funder Insurance Advisers




[insert: Local Authority name; BSF Standard Document; Bidder;] Close of Dialogue Derogations Form
                                                                      Page 21 of 46
                     OBC/     LA/
   Reference                              Proposed Amendment                           Justification   PfS Response
                      D        B




[insert: Local Authority name; BSF Standard Document; Bidder;] Close of Dialogue Derogations Form
                                                                      Page 22 of 46
                                                                     Appendix 4

                                              [insert name of LA] [insert name of document]
                                           [insert name of Bidder]: Final Bid Derogations Form

PfS approval of all Derogations to Standard Form Agreements is required for approval of a Local Authority’s Outline Business Case,
Close of Dialogue and Final Business Case. Only Derogations explicitly included in the relevant Derogations Form for each stage will
be considered by PfS. No Derogation is considered approved unless it is included in the appropriate Derogations Form and has been
specifically identified in that Derogations Form by PfS as having been approved by PfS. Please note that Derogations can only be
approved by the PfS Commercial Manager appointed for the project in question (or an Assistant Commercial Director or the
Commercial Director). Please refer to the PfS Guidance document “PfS Derogations Process – Instructions for Local Authorities and
Bidders” for information and instructions on completion of Derogation Forms.

Local Authority                                                              Bidder

Funder                                                                       Final Bid Submission Date

                                                                             Local Authority Financial
Local Authority Legal Advisers
                                                                             Advisers
Local Authority Insurance
                                                                             Bidder Legal Advisers
Advisers

Bidder Financial Advisers                                                    Bidder Insurance Advisers

Funder Legal Advisers                                                        Funder Financial Advisers

Funder Insurance Advisers




[insert: Local Authority name; BSF Standard Document; Bidder; Final Bid Derogations Form]

                                                                     Page 23 of 46
                     OBC/      LA/
   Reference                               Proposed Amendment                          Justification   PfS Response
                      D         B




[insert: Local Authority name; BSF Standard Document; Bidder; Final Bid Derogations Form]

                                                                     Page 24 of 46
                                                                 Appendix 5: Part 1

                                                [insert LA] Financial Close Derogations Form
                                                   [insert Bidder] Shareholders’ Agreement

PfS approval of all Derogations to Standard Form Agreements is required for approval of a Local Authority’s Outline Business Case,
Close of Dialogue and Final Business Case. Only Derogations explicitly included in the relevant Derogations Form for each stage will
be considered by PfS. No Derogation is considered approved unless it is included in the appropriate Derogations Form and has been
specifically identified in that Derogations Form by PfS as having been approved by PfS. Please note that Derogations can only be
approved by the PfS Commercial Manager appointed for the project in question (or an Assistant Commercial Director or the
Commercial Director). Please refer to the PfS Guidance document “PfS Derogations Process – Instructions for Local Authorities and
Bidders” for information and instructions on completion of Derogation Forms.

Local Authority                                                              Bidder

Funder                                                                       Submission Date

Version Number                                                               Local Authority Legal Advisers

Local Authority Financial                                                    Local Authority Insurance
Advisers                                                                     Advisers

Bidder Legal Advisers                                                        Bidder Financial Advisers

Bidder Insurance Advisers                                                    Funder Legal Advisers

Funder Financial Advisers                                                    Funder Insurance Advisers




[insert: Local Authority name; Shareholders’ Agreement; Version No; Bidder; Financial Close Derogations Form]
                                                                      Page 25 of 46
   Reference                              Gap                                            Insertion              PfS Response
Parties              Name and details of PSP (if not yet known)

Parties              Name and details of LEP

9.1(g)               Name of LEP, date of Shareholders’
                     Agreement and name of PSP.
13.8(a)              Details for provision of notice to the PSP
                     and the Company.
Execution clause     Name of LEP

HoldCo               Details of HoldCo

Initial Project Details of Initial Project Company
Company
Sch 2                Name Registered Office and Registered
                     Number of Company
Sch 2                Names of Initial Directors

Sch 2                Name of Secretary

Sch 4                Date of Shareholders’ Agreement, name of
                     company and PSP.
Sch 5                Name of Company, date of Shareholders’
                     Agreement and names of Shareholders.
Sch 7                Name of LEP and date of adoption of
                     Articles.




[insert: Local Authority name; Shareholders’ Agreement; Version No; Bidder; Financial Close Derogations Form]
                                                                      Page 26 of 46
                                                                 Appendix 5: Part 2

                                                 [insert LA] Financial Close Derogations Form
                                                [insert bidder] Strategic Partnering Agreement

PfS approval of all Derogations to Standard Form Agreements is required for approval of a Local Authority’s Outline Business Case,
Close of Dialogue and Final Business Case. Only Derogations explicitly included in the relevant Derogations Form for each stage will
be considered by PfS. No Derogation is considered approved unless it is included in the appropriate Derogations Form and has been
specifically identified in that Derogations Form by PfS as having been approved by PfS. Please note that Derogations can only be
approved by the PfS Commercial Manager appointed for the project in question (or an Assistant Commercial Director or the
Commercial Director). Please refer to the PfS Guidance document “PfS Derogations Process – Instructions for Local Authorities and
Bidders” for information and instructions on completion of Derogation Forms.

Local Authority                                                               Bidder

Funder                                                                        Submission Date

Version Number                                                                Local Authority Legal Advisers

Local Authority Financial                                                     Local Authority Insurance
Advisers                                                                      Advisers

Bidder Legal Advisers                                                         Bidder Financial Advisers

Bidder Insurance Advisers                                                     Funder Legal Advisers

Funder Financial Advisers                                                     Funder Insurance Advisers




[insert: Local Authority name; Strategic Partnering Agreement; Version No; Bidder; Financial Close Derogations Form]
                                                                       Page 27 of 46
   Reference                              Gap                                            Insertion                     PfS Response
Parties              Insert details of LEP and company details.

Initial Project      Insert name of Project Company if relevant.
Agreements
PSP                  Insert details of PSP if not established.

17.9(a)              Insert notice details for LEP

Signature page       Insert name of LEP

Sch 1 para 2.15      Insert final base date reference and date

Sch 8                Insert date of SPA and name of LEP.




[insert: Local Authority name; Strategic Partnering Agreement; Version No; Bidder; Financial Close Derogations Form]
                                                                       Page 28 of 46
                               Appendix 5: Part 3
                        Financial Close Derogations Form
                             PFI Project Agreement


[Not yet available, please contact the Commercial Manager allocated to your project.]




                                    Page 29 of 46
                               Appendix 5: Part 4
                        Financial Close Derogations Form
                            PFI Payment Mechanism


[Not yet available, please contact the Commercial Manager allocated to your project.]




                                    Page 30 of 46
                                                                 Appendix 5: Part 5

                                                [insert LA] Financial Close Derogations Form
                                                  [insert Bidder] Funders Direct Agreement

PfS approval of all Derogations to Standard Form Agreements is required for approval of a Local Authority’s Outline Business Case,
Close of Dialogue and Final Business Case. Only Derogations explicitly included in the relevant Derogations Form for each stage will
be considered by PfS. No Derogation is considered approved unless it is included in the appropriate Derogations Form and has been
specifically identified in that Derogations Form by PfS as having been approved by PfS. Please note that Derogations can only be
approved by the PfS Commercial Manager appointed for the project in question (or an Assistant Commercial Director or the
Commercial Director). Please refer to the PfS Guidance document “PfS Derogations Process – Instructions for Local Authorities and
Bidders” for information and instructions on completion of Derogation Forms.

Local Authority                                                               Bidder

Funder                                                                        Submission Date

Version Number                                                                Local Authority Legal Advisers

Local Authority Financial                                                     Local Authority Insurance
Advisers                                                                      Advisers

Bidder Legal Advisers                                                         Bidder Financial Advisers

Bidder Insurance Advisers                                                     Funder Legal Advisers

Funder Financial Advisers                                                     Funder Insurance Advisers




[insert: Local Authority name; Funders Direct Agreement; Version No; Bidder; Final Bid Derogations Form]
                                                                      Page 31 of 46
      Reference                            Gap                                           Insertion         PfS Response
Parties              Details of the Facility Agent – name,
                     registered office and registered number.

Parties              Details of the Security Trustee – name,
                     registered office and registered number.

Parties              Details of the Contractor – name, registered
                     office and registered number.
Accrued Rights       Confirm definition.
Value
Local Authority      Confirm definition.
Liability Cap

Relevant             Confirm correct cross references.
Required
Insurances

Relevant Year        Confirm definition.

Warning Notice       Confirm correct cross reference.

1.3                  Confirm which terms have the same
                     meaning as in the Senior Financing
                     Agreements.

2.3                  Confirm correct cross reference.

2.4                  Confirm correct cross reference.




[insert: Local Authority name; Funders Direct Agreement; Version No; Bidder; Final Bid Derogations Form]
                                                                      Page 32 of 46
      Reference                           Gap                                            Insertion         PfS Response
2.5                  Confirm name of account.

3.1                  Confirm correct cross reference.

7.3                  Confirm correct cross references.

10.3.2               Confirm use of drafting in square brackets.

10.4                 Confirm use of drafting in square brackets.
                     Confirm correct cross references.

10.5.1               Confirm Monthly Payment cross references
                     to clause and schedule.

10.5.3               Insert clause cross reference.

10.5.4               Confirm use of drafting in square brackets.

10.6.1               Termination Provisions – confirm whether
                     to include reference to Interim Payment
                     and/or Final Statement and clause
                     references.

10.6.3               Insert clause cross reference.

10.6.4               Confirm use of clause.

10.7                 If other key sub-contracts are used, then
                     insert name of relevant Collateral Warranty,
                     name of relevant contract and cross



[insert: Local Authority name; Funders Direct Agreement; Version No; Bidder; Final Bid Derogations Form]
                                                                      Page 33 of 46
     Reference                            Gap                                            Insertion         PfS Response
                     references where applicable.

10.14                Confirm use of FM Accrued Rights Life
                     Cycle Works Value and/or Construction
                     Accrued Rights Liquidated Damages Value.
                     Also include any other key rights in respect
                     of any other Collateral Warranties referred
                     to in clause 10.7.

10.15                Confirm correct terminology.

11.2.2               Confirm correct cross reference.

11.7                 Confirm correct cross reference.

12.4                 Confirm correct cross reference.

18                   Insert details for notices.




[insert: Local Authority name; Funders Direct Agreement; Version No; Bidder; Final Bid Derogations Form]
                                                                      Page 34 of 46
              Appendix 5: Part 6

  [insert LA] Financial Close Derogations Form
[insert Bidder] Management Services Agreement




                 Page 35 of 46
                                                                  Appendix 5: Part 7

                                                 [insert LA] Financial Close Derogations Form
                                                     [insert Bidder] ICT Services Contract

PfS approval of all Derogations to Standard Form Agreements is required for approval of a Local Authority’s Outline Business Case,
Close of Dialogue and Final Business Case. Only Derogations explicitly included in the relevant Derogations Form for each stage will
be considered by PfS. No Derogation is considered approved unless it is included in the appropriate Derogations Form and has been
specifically identified in that Derogations Form by PfS as having been approved by PfS. Please note that Derogations can only be
approved by the PfS Commercial Manager appointed for the project in question (or an Assistant Commercial Director or the
Commercial Director). Please refer to the PfS Guidance document “PfS Derogations Process – Instructions for Local Authorities and
Bidders” for information and instructions on completion of Derogation Forms.

Local Authority                                                               Bidder

Funder                                                                        Submission Date

Version Number                                                                Local Authority Legal Advisers

Local Authority Financial                                                     Local Authority Insurance
Advisers                                                                      Advisers

Bidder Legal Advisers                                                         Bidder Financial Advisers

Bidder Insurance Advisers                                                     Funder Legal Advisers

Funder Financial Advisers                                                     Funder Insurance Advisers




[insert: Local Authority name; ICT Services Contract; Version No; Bidder; Financial Close Derogations Form]
                                                                       Page 36 of 46
     Reference                            Gap                                             Insertion           PfS Response
Parties              Name of LEP and details of LEP

ICT Contractor       Insert details of the ICT Contractor

Shareholders’        Insert details of the PSP
Agreement
4.1.1                Insert  name        of      Local   Authority’s
                     Representative.
4.2.1                Insert name of LEP’s Representative

13                   Complete notice provisions




[insert: Local Authority name; ICT Services Contract; Version No; Bidder; Financial Close Derogations Form]
                                                                       Page 37 of 46
                                                                Appendix 5: Part 8

                                               [insert LA] Financial Close Derogations Form
                                                  [insert Bidder] ICT Payment Mechanism

PfS approval of all Derogations to Standard Form Agreements is required for approval of a Local Authority’s Outline Business Case,
Close of Dialogue and Final Business Case. Only Derogations explicitly included in the relevant Derogations Form for each stage will
be considered by PfS. No Derogation is considered approved unless it is included in the appropriate Derogations Form and has been
specifically identified in that Derogations Form by PfS as having been approved by PfS. Please note that Derogations can only be
approved by the PfS Commercial Manager appointed for the project in question (or an Assistant Commercial Director or the
Commercial Director). Please refer to the PfS Guidance document “PfS Derogations Process – Instructions for Local Authorities and
Bidders” for information and instructions on completion of Derogation Forms.

Local Authority                                                             Bidder

Funder                                                                      Submission Date

Version Number                                                              Local Authority Legal Advisers

Local Authority Financial                                                   Local Authority Insurance
Advisers                                                                    Advisers

Bidder Legal Advisers                                                       Bidder Financial Advisers

Bidder Insurance Advisers                                                   Funder Legal Advisers

Funder Financial Advisers                                                   Funder Insurance Advisers




[insert: Local Authority name; ICT Payment Mechanism; Version No; Bidder; Financial Close Derogations Form]
                                                                     Page 38 of 46
   Reference                             Gap                                           Insertion              PfS Response
None.




[insert: Local Authority name; ICT Payment Mechanism; Version No; Bidder; Financial Close Derogations Form]
                                                                     Page 39 of 46
                                                                 Appendix 5: Part 9

                                            [insert LA] Financial Close Derogations Form
                           [insert Bidder] Design and Build [Target Cost/Lump Sum delete as appropriate]

PfS approval of all Derogations to Standard Form Agreements is required for approval of a Local Authority’s Outline Business Case,
Close of Dialogue and Final Business Case. Only Derogations explicitly included in the relevant Derogations Form for each stage will
be considered by PfS. No Derogation is considered approved unless it is included in the appropriate Derogations Form and has been
specifically identified in that Derogations Form by PfS as having been approved by PfS. Please note that Derogations can only be
approved by the PfS Commercial Manager appointed for the project in question (or an Assistant Commercial Director or the
Commercial Director). Please refer to the PfS Guidance document “PfS Derogations Process – Instructions for Local Authorities and
Bidders” for information and instructions on completion of Derogation Forms.

Local Authority                                                              Bidder

Funder                                                                       Submission Date

Version Number                                                               Local Authority Legal Advisers

Local Authority Financial                                                    Local Authority Insurance
Advisers                                                                     Advisers

Bidder Legal Advisers                                                        Bidder Financial Advisers

Bidder Insurance Advisers                                                    Funder Legal Advisers

Funder Financial Advisers                                                    Funder Insurance Advisers




[insert: Local Authority name; Design & Build Target Cost/Lump Sum Option; Version No; Bidder; Final Bid Derogations Form]
                                                                     Page 40 of 46
      Reference                           Gap                                           Insertion                            PfS Response
Parties             Name of LEP and details of LEP

Ancillary Rights    Colour of access and egress routes.
limb (b)
Ancillary Rights    Colour of service media.
limb (c)
Asbestos            Identify any surveys carried out post CoD to
Surveys             be included here. If none please confirm.
Bid Date            Confirm date.

Buildings           Identify any surveys carried out post CoD to
Surveys             be included here. If none please confirm.
ICT                 Insert correct reference to Local Authority’s
Infrastructure      requirements.
Joint Insurance Insert account number and where held.
Account
Longstop Date       Confirm date.

Principal Building List relevant parts of the Works
Contractor
3.1                 Insert  name        of      Local   Authority’s
                    Representative.
3.6                 Insert name of LEP’s Representative

5.6A                Confirm whether there are any Local
                    Authority Planning Conditions and whether
                    drafting to be used.




[insert: Local Authority name; Design & Build Target Cost/Lump Sum Option; Version No; Bidder; Final Bid Derogations Form]
                                                                     Page 41 of 46
     Reference                            Gap                                           Insertion                            PfS Response
24.5                Insert rate of LADs if Alternative A applies.

26.3                Insert claim value

34.2.3              Insert Uninsured Losses amount.

39.7.4              Insert number of years.

42.1                Insert details for service of notices

42.2                Insert details for provision of information to
                    representatives
Sch 7 Part 1        Confirm any phasing arrangements.

Sch 7 Part 2        Confirm any phasing arrangements.

Sch 9               Confirm cost schedule and interest rate

Sch 12 para 1.4     Confirm maximum deductible

Sch 12 para 3.3     Confirm maximum deductible

18 Part 1           Complete table.

18 Part 2           Complete table.

20                  Insert any relevant Local Authority Planning
                    Conditions.




[insert: Local Authority name; Design & Build Target Cost/Lump Sum Option; Version No; Bidder; Final Bid Derogations Form]
                                                                     Page 42 of 46
                                                                    Appendix 6

                                            [insert name of LA] [insert name of document]
                               [insert name of Selected Bidder]: Exceptional Derogation Request Form

Local Authorities and Bidders should note that PfS cannot consider any further Derogations, whether proposed by the Local
Authority or the Bidder, once the dialogue has closed save for:

      the gaps specifically identified in the PfS Financial Close Derogations Form for each Standard Form Agreement included at
       Appendix 5; and

      those which arise from an unforeseen change in circumstances which it was not possible to anticipate during the dialogue
       (please note that this exception must not be used to defer finalising issues which are capable of being finalised during the
       dialogue).

PfS approval of all Derogations to Standard Form Agreements is required for approval of a Local Authority’s Outline Business Case,
Close of Dialogue and Final Business Case. Only Derogations explicitly included in the relevant Derogations Form for each stage will
be considered by PfS. No Derogation is considered approved unless it is included in the appropriate Derogations Form and has been
specifically identified in that Derogations Form by PfS as having been approved by PfS. Please note that Derogations can only be
approved by the PfS Commercial Manager appointed for the project in question (or an Assistant Commercial Director or the
Commercial Director). Please refer to the PfS Guidance document “PfS Derogations Process – Instructions for Local Authorities and
Bidders” for information and instructions on completion of Derogation Forms.

Local Authority                                                             Selected Bidder

Funder                                                                      Submission Date

Version Number                                                              Local Authority Legal Advisers

Local Authority Financial                                                   Local Authority Insurance
Advisers                                                                    Advisers



[insert: Local Authority name; BSF Standard Document; Selected Bidder; Exceptional Derogation Request Form]
                                                                    Page 43 of 46
Bidder Legal Advisers                                                       Bidder Financial Advisers

Bidder Insurance Advisers                                                   Funder Legal Advisers

Funder Financial Advisers                                                   Funder Insurance Advisers



Derogation Requested


Justification for Derogation


Reason why this Derogation
could not have been dealt with
in the dialogue period OR


Confirmation that the
Derogation constitutes
confirmation or clarification of
the Final Bid.




[insert: Local Authority name; BSF Standard Document; Selected Bidder; Exceptional Derogation Request Form]
                                                                    Page 44 of 46
                                                             Appendix 7

                              Partnerships UK Template Table for SOPC/BSF Derogations
1. Please include details of the Local Authority, the Bidders, the Funders and their respective advisors, including a structure chart or
   organogram for each of the parties. Please include a short description of the transaction that this project agreement relates to (and
   where necessary, include any relevant background information such as the number of schools involved, what Wave this project
   agreement relates to, and whether these derogations have been approved by PUK as part of an earlier Wave).
2. Please include the date this table is originally submitted to PUK. PUK will then respond with comments against each derogation. If any
   derogations and/or comments are subsequently revised, please ensure that such revisions are listed below the initial
   submission/comment together with the date that revision/comment was inserted to ensure that the whole history of the derogation is
   retained in the one table. Any further versions of the table should be cumulative and not cross refer to separate, previous versions of
   this table. Please do not remove any derogations from this table once submitted even if they are subsequently withdrawn or
   accepted/approved by PUK.
3. Please confirm details of any capital contributions, the quantum (as well as a percentage of the total capex) and the drafting which
   evidences compliance with HMT’s core principles (see 3.9 of SOPC4). Please also note any discussions with HMT/DCSF which may
   have previously taken place during the procurement regarding approval of the capital contributions. If, at the time of submitting the
   derogations, the Local Authority has not yet obtained HMT/DCSF approval, please provide us with a full description (as noted above
   showing compliance with paragraph 3.9 of SOPC4) as well as full justification for the capital contribution. This can be the subject of a
   separate paper if necessary.
4. A marked-up PA & FDA (showing the same drafting deletions/insertions as set out in the derogations below) should also be submitted
   with this table.
5. PFS will review this derogations table after submission by the Local Authority and make comments where necessary in the last column
   prior to submitting it to PUK to ensure that only the genuinely project specific derogations which are supported by PfS are submitted to
   PUK.




                                                             Page 45 of 46
                                                                       Table of Derogations

  PA/FDA        SOPC                          Drafting Amendments                                         Justification                PUK/PFS Comments
 clause ref     clause
                ref
   (& BSF
clause ref if
 different)

                         [Each derogations table should be a stand-alone document and          [Where a derogation sought is
                         contain the actual drafting amendments redlined against the           project specific, detailed
                         relevant clause from the BSF Project Agreement. Where new             justifications as to what makes it
                         wording or additional clauses are being proposed, the full text of    project specific must be stated in
                         those new or additional clauses should be shown here as redlined      this column. Merely noting that a
                         insertions. Similarly, where clauses are being deleted, the wording   derogation is “project specific”
                         which is being removed should be shown here as redlined               with no project specific reasoning is
                         deletions.]                                                           insufficient. Furthermore please
                                                                                               also note that derogations that are
                                                                                               for clarificatory drafting purposes
                                                                                               only are not project specific and are
                                                                                               not acceptable derogations.]




                                                                            Page 46 of 46

				
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