Development Services Agreement Template

Development Services Agreement Template – Customer Explanatory Notes Clause Heading Background Contract Governance Criteria Explanation The Development Services covers activities or services that Network Rail provides during the development stage of the project. The design and development activities may be carried out by Network Rail directly, or by Consultants and Contractors employed by Network Rail. The Services provided may include physical (intrusive) surveys if information is required to achieve the design. The DSA is based on Network Rail undertaking and managing the Services. Where the Customer also intends to undertake design and employ consultants it is possible to offer the Customer a DSA reflecting the terms necessary. The agreement provides for reasonable and proper costs (including costs of risks not contracted out, insured or covered through the Industry Risk Fund) to be passed through to the Customer on an emerging cost basis. If funding constraints or other concerns mean that the Customer requires greater certainty over costs, it may be possible to offer a fixed price DSA. However, it is not possible to fix some elements, such as the costs of Necessary Consents, and a fixed price at this stage will not mean that the costs of the Works can be fixed: as there would still be a requirement to procure the Works to an agreed set of Project Requirements. If the Services are relatively uncomplicated and straight forward to manage, and the procurement of a consultant is not required it may be more appropriate to use the Basic Services Agreement. The DSA is not intended to cover implementation. Clause 1 – Definitions and Interpretation Capitalised terms used in these guidance notes are defined in the agreement. This clause includes general provisions as to consents including the fact that Network Rail retains sole discretion in relation to safety issues. and Responsibilities; Network Rail will discuss and agree a scope of Services that it will carry out on Clause 2 – Obligations of Roles These Explanatory Notes should not be viewed as part of the Agreement and are only for guidance purposes. In the event of any discrepancy between the Agreement and these Explanatory Notes, the Agreement shall prevail. 061031 DSA Explanatory Notes – version 1 1 of 11 Development Services Agreement Template – Customer Explanatory Notes Clause Heading the Parties Contract Governance Criteria Explanation Scope / Time / Cost; Risks and behalf of the Customer. In carrying out the Services for the Customer, Network Incentives; Monitoring; Control Rail will have a range of obligations towards its Customer. However, Network Rail will be contracting directly with consultants and as such has direct liability to them for payment and other contracted obligations. It is therefore important that costs and liabilities are appropriately identified and addressed in the agreement. It should also be remembered that, in addition to Network Rail’s obligations towards its Customer and its contractors and consultants, it also has obligations as operator of the network relating to such issues as safety, operational continuity, land rights and other legal/regulatory requirements. Network Rail undertakes to carry out the Services set out in Schedule 1. It undertakes to do this to a standard of care set out in relation to the Works Product. This includes taking into account its other obligations and doing so in a timely and efficient manner having regard to its licence obligations. The order in which the standards are applied to Network Rail’s obligations cannot be changed. The clause sets out the conditions under which Network Rail supplies information to the Customer and warrants its accuracy. The Customer is required to provide information and instructions to Network Rail in a diligent and professional manner. Clause 3 - Objectives and Roles and Responsibilities; The Customer provides Network Rail with a Brief which should describe the Brief Scope / Time / Cost background to the Project and what it is aiming to achieve by the objectives it is setting. Network Rail and the Customer will discuss and agree a Remit for the specific individual actions that are required (these become the Services) and the Deliverables (such as drawings, reports, specifications plans and so on) that Network Rail will provide. If the Remit cannot be agreed it can be referred to These Explanatory Notes should not be viewed as part of the Agreement and are only for guidance purposes. In the event of any discrepancy between the Agreement and these Explanatory Notes, the Agreement shall prevail. 061031 DSA Explanatory Notes – version 1 2 of 11 Development Services Agreement Template – Customer Explanatory Notes Clause Heading Contract Governance Criteria Explanation the Escalation Procedure (see later). This clause also sets out the flexibility between Network Rail and the Customer to alter or deviate from the agreed Remit, the steps each is required to take before being allowed to do so, and who is liable for costs incurred. Clause 4 – Development Roles and Responsibilities; Programme and Costs Scope / Time / Cost; Monitoring; Estimate Control The Development Programme sets out the activity schedule that the Customer and Network Rail agree to work to. Network Rail’s obligation is one of reasonable endeavours and it cannot commit to maintaining programme in all events. At this stage where such changes to the Development Programme occur, experience shows that this is usually due to the potential for interfacing conflict with other operations on the network where surveys are required, or to Variations once option selection occurs. The Customer uses reasonable endeavours to comply with any obligations it has under the Development Programme, such as providing instructions. The consequence of not meeting these obligations may mean that the Development Programme has to be revised. The Development Programme and Costs Estimate may be revised from time to time in consultation with the Customer. Clause 5 - Consents Roles and Responsibilities; The parties will agree who is best placed to obtain Consents. For example, if Risks and Incentives the Customer is a train operator, then they may be best placed to undertake Regulated Change (that is, the change procedures that the rail industry must follow to ensure that all the affected rail industry parties are properly consulted). It should be noted that as the grant of such external consents is not within its power, Network Rail cannot guarantee when Necessary Consents (including Regulated Change) will be granted (if at all) or the terms on which they will be granted. These Explanatory Notes should not be viewed as part of the Agreement and are only for guidance purposes. In the event of any discrepancy between the Agreement and these Explanatory Notes, the Agreement shall prevail. 061031 DSA Explanatory Notes – version 1 3 of 11 Development Services Agreement Template – Customer Explanatory Notes Clause Heading Contract Governance Criteria Explanation The Customer cannot have access to the network. Network Rail will carry out all the surveys and inspections necessary to achieve the Remit. If the Customer wants to undertake their own surveys and investigations, these will be arranged separately through an Asset Protection Agreement or Basic Asset Protection Agreement or if this is combined with other design through an amended DSA. Clause 6 - Access and Roles and Responsibilities Possessions Clause 7 Project Roles and Responsibilities; Project Development Meetings are used to maintain good communication Development Meetings Monitoring; Control between Network Rail and the Customer relating to reporting progress of the services, programme adherence, budget and cost control, issues arising etc. The Customer arranges monthly meetings with Network Rail to review progress. Clause 8 - Consultants Roles and Responsibilities; Control Network Rail will appoint and manage Consultants to carry out designs for the Customer but the Customer will be aware of the contractual terms agreed between Network Rail and the Consultant, including the terms of any intellectual property licence and collateral warranty. The Customer can also object to the appointment of any Consultant. If it does so, and the parties are unable to agree an alternative Consultant, Network Rail may partially suspend the Services. Either party may refer the issue to the Escalation Procedure, but if it is not possible to resolve the issue, Network Rail can terminate the agreement. Network Rail will use its reasonable endeavours to make sure that the Consultant has the appropriate level of insurance agreed between the Parties, or may decide to effect the insurance itself (for example because it will reduce the cost to the Customer). Network Rail’s obligation against its standard of care is to appoint and manage, procure compliance by the Consultant with its obligations and procure the design from the Consultant. Network Rail does not guarantee the These Explanatory Notes should not be viewed as part of the Agreement and are only for guidance purposes. In the event of any discrepancy between the Agreement and these Explanatory Notes, the Agreement shall prevail. 061031 DSA Explanatory Notes – version 1 4 of 11 Development Services Agreement Template – Customer Explanatory Notes Clause Heading Contract Governance Criteria Explanation Consultant will be able to do so nor does Network Rail accept liability for the Consultant failing to meet its obligations (provided Network Rail has complied with its own obligations in the selection and management of the Consultant). It does not accept design risk, which should be borne by the designer. The Customer is protected by its ability to object to the Consultant and to take direct action against the Consultant under the collateral warranty. In practice where this would happen Network Rail will manage the Consultant and seek recourse for the Customer through its contract with the Consultant. To the extent Network Rail has not met the standard of care (Clause 2), it may be in breach of its obligations and therefore liable up to its limit of liability (Clause 15) for failure to select appropriate Consultants or management of them. Clause 9 - Variation of Roles and Responsibilities; If a change to the Services or Project is required by the Customer or Network Services Scope / Time / Cost; Risks and Rail, the party making the request is required to issue a Variation Request Incentives; Monitoring; Control before it can be considered by the other party. Variation Requests must be agreed by both parties unless the change arises because of a Design Issue (a change in law, standards, regulatory requirements or the Network Licence affecting the Project) or a Relief Event. In that case Network Rail will provide a revised Costs Estimate and Development Programme. Where this is post GRIP Stage 4 Network Rail will address as a Relief Event (see Clause 10). Where the Variation is accepted by both Parties then the Customer is required to pay the costs of the Variation unless the variation is a Mandatory Variation. If the proposed Variation would increase the Costs Estimate at that time by more than 10%, the Customer may refer the issue to the Escalation Period. If it is not resolved to the Customer’s satisfaction within 15 Working Days, the Customer may terminate by 20 Working Days’ notice. If it does not do so, it is deemed to have agreed to the Variation. These Explanatory Notes should not be viewed as part of the Agreement and are only for guidance purposes. In the event of any discrepancy between the Agreement and these Explanatory Notes, the Agreement shall prevail. 061031 DSA Explanatory Notes – version 1 5 of 11 Development Services Agreement Template – Customer Explanatory Notes Clause Heading Clause 10 Compensation and Relief Contract Governance Criteria Scope, Time, Cost; Control Explanation The Customer will not be required to cover its own direct costs in excess of £10,000 (the threshold is to avoid a “claims culture”) or additional Network Rail costs incurred as a result of a Relief Event, unless such event was caused by the Customer or a contractor appointed by the Customer (other than Network Rail). Relief Events are industry related events and encompass cancellation/alteration of possessions, interference from Interfacing Projects, Network Operation Issues and Mandatory Variations. Network Rail will cover any costs resulting from Relief Events where it is unable to claim from other parties and will recover such costs from the Industry Risk Fund Clause 11 - Intellectual Roles and Property Rights Control Responsibilities; Network Rail will own all IPR connected with any Work Product. Where Network Rail creates or develops any IPR necessary for the Project, it will grant to the Customer a license to use for purposes connected with the Project. Network Rail will also grant sub-licences to the Customer for the use of the IPR by third parties involved in the Project, and these rights carry confidentiality restrictions. Clause 12 – Completion Certificate Roles and Responsibilities; Once Network Rail believes that all the Services and Deliverables (or a specific Scope / Time / Cost; Monitoring; part of the Services and Deliverables) identified in the Remit have been Control completed, it will issue a Provisional Completion Certificate to the Customer. The Customer may issue an Objection Notice within the objection period saying what other matters it believes are outstanding, otherwise the Provisional Completion Certificate shall become the Completion Certificate . If the Customer does raise an Objection Notice, there is a procedure to address the issues raised and ultimately, if the Customer does not accept the Services and Deliverables, the matter may be referred for adjudication. Clause 13 - Network Rail Roles and Responsibilities; This clause sets out the procedure for invoicing the Customer for Costs Scope / Time / Cost; Monitoring; reimbursement of costs as set out in Schedule 2, for payment by the Customer Control of invoices and the rights and procedures for the Customer to object to such These Explanatory Notes should not be viewed as part of the Agreement and are only for guidance purposes. In the event of any discrepancy between the Agreement and these Explanatory Notes, the Agreement shall prevail. 061031 DSA Explanatory Notes – version 1 6 of 11 Development Services Agreement Template – Customer Explanatory Notes Clause Heading Contract Governance Criteria invoices Clause 14 - Value Added Tax This clause sets out the way VAT shall be applied. Explanation Clause 15 - Limitation of Roles and Responsibilities; Subject to qualifications set out in this clause, neither party shall be liable for a Liability Scope, Time, Cost; Risks and breach of the Agreement unless the aggregate amount of the claims exceeds Incentives; Control £10,000 (this is to avoid a “claims culture”). Network Rail's liability relating to the agreement is limited to the 300% of the Network Rail Fee. This limitation does not apply where losses are a result of Network Rail’s negligence or to claims for Relief Events, or to claims for death or personal injury. It also does not apply to any compensation actually recovered from Consultants or insurers. Compensation to the Customer in the event that Network Rail fails to meet the Long Stop Date due to its breach or negligence is covered by liquidated damages calculated on a daily basis. The Customer’s liability to Network Rail is limited to 250% of the Costs Estimate. This limitation does not apply to various payment obligations (including Network Rail Costs), where losses are a result of the Customer’s negligence or fraud or for death or personal injury. It also does not apply to design services provided by the Customer or any consultant appointed by it (other than Network Rail) or to any compensation it is entitled to recover from a contractor or insurer. Neither Party shall be liable for any consequential loss suffered by the other Party. Clause 16 - Indemnity Roles and Responsibilities; As Network Rail has obligations as operator of the network relating to land Risks and Incentives rights, operational continuity and legal / regulatory requirements, the Customer indemnifies Network Rail against Losses resulting from claims from third These Explanatory Notes should not be viewed as part of the Agreement and are only for guidance purposes. In the event of any discrepancy between the Agreement and these Explanatory Notes, the Agreement shall prevail. 061031 DSA Explanatory Notes – version 1 7 of 11 Development Services Agreement Template – Customer Explanatory Notes Clause Heading Contract Governance Criteria Explanation parties arising from the project, infringement by the Customer or a sub-licensee of Intellectual Property Rights or alleged breaches of CDM regulations. The Customer’s liability to indemnify Network Rail is, however, limited to the Customer’s maximum liability under Clause 15 unless such claims arise out of the Customer’s negligence or fraud. The claims procedure is also set out in this clause. Clause Majeure 17 Force Scope / Time / Cost; Risks and Force Majeure events are in the definitions. Both parties are relieved of liability Incentives; Monitoring for non-performance of their obligations if it is as a result of a Force Majeure event as long as they have taken all reasonable steps to prevent and mitigate the consequences and have used all reasonable endeavours in accordance with Good Industry Practice to comply with their obligations. The Clause sets out the actions each Party is required to take if a Force Majeure event arises, including obligations to inform the other party, and that where possible steps are taken to minimise the effect. Both parties have a reasonable endeavours obligations to modify the Development Programme and undertake other modifications to their obligations and terms of agreement in order to mitigate the effects of the Force Majeure event. If the Force Majeure event prevails and no such agreement occurs on or after three months from the occurrence of the event, then either party has the right to terminate the agreement with immediate effect, in which case the provisions for Termination (Clause 18) will apply. It should be noted that, unlike most force majeure clauses that feature in commercial contracts, strikes are restricted to single circumstance strikes which are outside the railway industry in this Agreement. Clause 18 - Termination Roles and Responsibilities; Network Rail may suspend the Services if a Consultant’s contract is and Scope, Time, Cost; Control suspended or in the event of an Operational Emergency or Safety Critical Event or if the Customer lodges an objection to a proposed Consultant or if the These Explanatory Notes should not be viewed as part of the Agreement and are only for guidance purposes. In the event of any discrepancy between the Agreement and these Explanatory Notes, the Agreement shall prevail. 061031 DSA Explanatory Notes – version 1 8 of 11 Development Services Agreement Template – Customer Explanatory Notes Clause Heading Suspension Contract Governance Criteria Explanation Customer is in default on payment. Procedures are set out for dealing with such suspensions. The criteria and procedures governing termination are set out in this clause. As well as the usual rights to terminate for persistent or material breach or insolvency, the Customer may terminate if the costs of the Services exceed the Costs Estimate by 10% (taking into account any Variations), and it can also terminate on two months’ notice. Upon issue or receipt of termination Network Rail will reduce as quickly as possible its expenditure, and bring the Services to a close in an orderly manner. Clause 19 Consequences of Termination - Roles and Responsibilities This clause sets out the consequence of termination. The Customer must pay Network Rail Costs for the Services supplied up to the date of termination, whatever the cause of the termination. Certain obligations, such as indemnities and confidentiality, survive termination of the agreement. Clause 20 - Confidentiality Roles and Responsibilities; This clause sets out the rules each Party agrees to comply with to maintain the Monitoring; Control confidentiality of information arising or being passed between the Parties and their representatives. Breach of confidentiality can create a liability. Where the Customer is subject to Freedom of Information legislation additional wording will be incorporated to cover this. Clause 21 Resolution Dispute Control Where a Dispute arises it is important that the matter is addressed and resolved quickly. As such a management procedure (the Escalation Procedure) to escalate such matters is in place and should this not resolve the Dispute, an adjudication process is set out. This clause sets out the procedure that needs to be adhered to in order to constitute a validly delivered notice to each Party. Non adherence to this Clause 22 - Notices Monitoring; Control These Explanatory Notes should not be viewed as part of the Agreement and are only for guidance purposes. In the event of any discrepancy between the Agreement and these Explanatory Notes, the Agreement shall prevail. 061031 DSA Explanatory Notes – version 1 9 of 11 Development Services Agreement Template – Customer Explanatory Notes Clause Heading Contract Governance Criteria Explanation procedure may mean rights could be compromised if formal notice is required in order to apply or receive such rights. Please note that email is not an acceptable form of notice. Clause 21 - Miscellaneous This clause covers a variety of general issues. These include: • neither Party has the right to assign its rights and obligations in the Agreement without the prior written permission of the other Party, provided it may do so without consent if assignment is to its statutory successor the Agreement does not constitute a partnership between the Parties and neither Party has the right to act as an agent for the other the Agreement does not create any right under the Contract (Rights of Third Parties) Act 1999 which is enforceable by any person who is not a Party to the Agreement. This essentially means that no one else has the right to enforce these terms on Network Rail or the Customer, other than each other or as directed by a Dispute Resolution or the Courts. • • Schedule 1 Schedule 2 Schedule 3 Details for delivery of notices The components of Network Rail Costs are detailed here The Brief describing the background to the Project and what the Customer hopes to achieve by the objectives it wishes to set. This must be supplied by the Customer. The Remit will be developed jointly by the Customer and Network Rail. Note that Network Rail cannot take on system output risk (such as the availability of new train paths) as this is not within its control but only infrastructure capability risk. Schedule 4 These Explanatory Notes should not be viewed as part of the Agreement and are only for guidance purposes. In the event of any discrepancy between the Agreement and these Explanatory Notes, the Agreement shall prevail. 061031 DSA Explanatory Notes – version 1 10 of 11 Development Services Agreement Template – Customer Explanatory Notes These Explanatory Notes should not be viewed as part of the Agreement and are only for guidance purposes. In the event of any discrepancy between the Agreement and these Explanatory Notes, the Agreement shall prevail. 061031 DSA Explanatory Notes – version 1 11 of 11