The following issues have been raised by Virgin Media Business regarding the Terms and Conditions of RM3825 HSCN Access DPS.

DocClauseRAGThe IssueNSF TextAugust TextOctober/November Text
Main AgreementClause 6.1AmberThe problem here is new text on ‘non-exclusive assets’ (it wasn’t in NSF or the Aug version) as it refers to information that is: propriety, subject to change, and not relevant. In short, why should we give an Incoming Relevant Supplier details of our shared core network? Where a Relevant Supplier is bidding to provide New Services in circumstances where the Supplier or an Affiliate of the Supplier is already providing (or due to provide) Legacy Services to a Contracting Body, the Supplier shall promptly provide the relevant Contracting Body and/or, if so required by the Contracting Body, the Relevant Supplier with all reasonable information and assistance as may be required from time to time to enable the relevant Contracting Body and/or the Relevant Supplier, as appropriate, to:same as NSFWhere a Relevant Supplier is bidding to provide New Services in circumstances where the Supplier or an Affiliate of the Supplier is already providing (or due to provide) Legacy Services to a Contracting Body, the Supplier shall promptly provide the relevant Contracting Body and/or, if so required by the Contracting Body, the Relevant Supplier with all reasonable information and assistance, including information about Non-Exclusive Assets, as may be required from time to time to enable the relevant Contracting Body and/or the Relevant Supplier, as appropriate, to:
Main AgreementClause 17.6AmberThere were lots of comments raised about this clause, the general response from CCS was the “The format of the MI template will not change, just the web portal that is used to upload it.”, but if that is so then why does the clause have to be drafted the way it is?

The drafting requires suppliers to use best endeavours (which has a specific legal meaning) to implement a system.

Best endeavours obligations are generally considered onerous commitments for a contracting party, but in this instance the scope of the obligation is unknown making the commitment particularly onerous. Suppliers cannot predict the scope, requirements, interfaces, or costs they might face in the implementation of an unknown system.
not presentThe Supplier acknowledges and agrees that the Authority may at any time during the Dynamic Purchasing System Period and upon serving two months’ written notice, introduce a new electronic system to monitor and collect the Management Levy (the “System”) and upon receipt of the written notice the Supplier shall use its best endeavours to implement the System.same as Aug
Main AgreementClause 20.2.2RedSeveral comments were raised about this clause. The issue is that “Subject to the Authority’s continued compliance with Clause [20].2.6” was removed. 20.2.6 says that the Authority will notify of claims, not make am IPR admission without checking, and allow the supplier to negotiate IPR claims.

By removing this “subject to” the supplier would still have to indemnify the Authority even if, for example, it made an admission of IPR liability that the supplier did not agree with.
Subject to the Authority’s continued compliance with Clause 19.2.6 the Supplier shall during and after the Framework Period, on written demand indemnify the Authority against all Losses incurred by or awarded against or agreed to be paid by the Authority (whether before or after the making of the demand pursuant to the indemnity hereunder) arising from an IPR Claim. The Supplier shall during and after the DPS Period, on written demand indemnify the Authority against all Losses incurred by or awarded against or agreed to be paid by the Authority (whether before or after the making of the demand pursuant to the indemnity hereunder) arising from an IPR Claim. same as Aug
Main AgreementSchedule 2 Part A,
clause 3.1.3
RedThis clause states that an HSCN Connectivity Service may be unmanaged. This would be in breach of the HSCN obligations.not presentnot presentThe HSCN Connectivity Services may be managed and/or unmanaged and may have variables and options around its provision including, but not limited to, the following:
Main AgreementSchedule 2 Part A,
clause 3.1.5
AmberWe are surprised by the inclusion of ‘Pay-As-You-Go’ with no consultation and no formal defination as to what this means and the fact that it is not a requirement under the HSCN Obligations.not presentnot presentA variety of Contracting Body payment options, including Pay-As-You-Go, are required for the Core Components and, where appropriate for Supplementary Components
Main AgreementSchedule 4,
Clause 2.1.1 (k)
AmberThe text itself does not make sense - sub-clause (ii) is particularly difficult to understand. However it is also not clear why these clauses have been introduced because CCS appear to have aligned the supplier questionnaire to the ESPD.

It is also not clear what might cause a suppliers ESPD to be deemed ‘not satisfactory’, and even if it was why would a customer suddenly reject the suppliers tender response after having just awarded that supplier their business?
not presentnot present(k) request from the supplier of the most economically advantageous solution their European Single Procurement Document:
(i) if the supplier's European Single Procurement Document meets the standards set out in the SQ, award in accordance with paragraph 2.1.2(m); or
(ii) if the supplier's European Single Procurement Document is not satisfactory deem their General Tender Response non-compliant and on the basis of the award criteria, establish which of the remaining General Tender Responses provides the most economically advantageous solution and repeat the process under 2.2.1(k); and
(A) where the supplier's European Single Procurement Document is not satisfactory notify the Authority;
Main AgreementSchedule 9,
clause 4
RedIt is not appropriate for a supplier to determine and certify that a Customer has followed a 'legitimately tendered procurement route' or whether the customer has followed an 'Authority mandated process’.

CCS responses to the several questions on this point is “these are standard reporting requirements (as are consistent with other recent procurements) which CCS considers are reasonable and proportionate to assure the Supplier's compliance with its obligations under the DPS Agreement”.

We disagree. We have not seen this requirement before, it is not consistent with other procurements (even recent ones), we do not consider it to be reasonable or proportionate.
We have tested from the order processing and invoicing systems a sample of [ ] [Insert number of sample transactions tested] public sector orders placed outside the Framework Agreement during our audit for the financial year ended [insert financial year] as follows:We have tested from the order processing and invoicing systems a sample of [ ] [Insert number of sample transactions tested] public sector orders placed outside the Dynamic Purchasing System Agreement during our audit for the financial year ended [insert financial year] and confirm they have been identified correctly as orders placed outside the Dynamic Purchasing System Agreement, an appropriate and legitimately tendered procurement route has been used to place those orders, and those orders should not otherwise have been routed via centralised and mandated procurement processes executed by the Authority.same as Aug
Call Off Clause 10.1RedThe key changes to this section are:
(i) removal of the Service Credit Cap (there were quite a few questions on this)
(ii) requirement to reimburse Charges already paid for affected Services and
(iii) express call out of persistent breach entitling termination of Call Off Contract

CCS said that "It follows logically from this that Service Credits cannot exceed 15% of the relevant Call Off Contract Charges”, we disagree with that and with the suggestion that all cases where cap may apply have been acceptably covered "within the Supplier's limitation of liability under Call Off Clause 32.2.1(a)".

Given that CCS responses on this topic do not appear to be answers that address the issue, it seems that CCS are acting to enable customers to behave unreasonably. This is especially concerning given the presence of private sector customers in the DPS.
11.1 On the occurrence of a Critical Service Level Failure:
11.1.1 any Service Credits that would otherwise have accrued during the relevant Service Period shall not accrue; and
11.1.2 the Customer shall (subject to the Service Credit Cap set out in Clause 33.2 (Financial Limits)) be entitled to withhold and retain as compensation for the Critical Service Level Failure a sum equal to any Call Off Contract Charges which would otherwise have been due to the Supplier in respect of that Service Period ("Compensation for Critical Service Level Failure"), provided that the operation of this Clause 11.1 shall be without prejudice to the right of the Customer to terminate this Call Off Contract and/or to claim damages from the Supplier for material Default as a result of such Critical Service Level Failure.
same as NSF10.1 On the occurrence of a Critical Service Level Failure:
10.1.1 any Service Credits that would otherwise have accrued during the relevant Service Period shall not accrue; and
10.1.2 the Charges in respect of the relevant Standalone Service Instance or Integrated Service Instance Set applicable to the Service Period in which the Critical Service Level Failure occurs shall be deducted from the Call Off Contract Charges which otherwise would have been payable by the Customer and the Supplier shall not invoice the Customer for the same; and
10.1.3 where the Supplier has already invoiced the Charges in respect of the relevant Standalone Service Instance or Integrated Service Instance Set applicable to the Service Period in which the Critical Service Level Failure occurs to the Customer but the Customer has not yet paid such Charges the Supplier shall promptly issue a credit note to the Customer for the value of such Charges; and
10.1.4 where the Customer has already paid the Charges in respect of the relevant Standalone Service Instance or Integrated Service Instance Set applicable to the Service Period in which the Critical Service Level Failure occurs the Supplier shall promptly reimburse the Customer for the value of such Charges; and
10.1.5 the Customer shall be entitled to terminate the relevant Standalone Service Instance or Integrated Service Instance Set (or any Service Instance included in the Integrated Service Instance Set) for material Default; and
10.1.6 where two (2) Critical Service Level Failures occur in any three (3) consecutive Service Periods, the Customer will be entitled to terminate this Call Off Contract for material Default.
Call Off Clause 32.2RedUnder NSF the Service Credit Cap was defined to be:
“(a) in the period from the Call Off Commencement Date to the end of the first Call Off Contract Year fifteen thousand pounds (£15,000); and
(b) during the remainder of the Call Off Contract Period, thirty five per cent (35%) of the Call Off Contract Charges payable to the Supplier under this Call Off Contract in the period of twelve (12) Months immediately preceding the Month in respect of which Service Credits are accrued; unless otherwise stated in the Order Form.”

And under NSF the max of £500k or 150% referenced in 33.2 was only for Defaults.

In RM3825 CCS are stating that by removing the cap and setting the Supplier’s total aggregate liability for all Losses at the max of £100k or 150% is somehow better for suppliers. This is simply not the case. If the call-off is for a large deal where the charges payable in a year may be tens of millions of pounds then 150% of that amount becomes particularly onerous.
33.2.1 Subject to Clause 33.1 (Unlimited Liability), the Supplier's total aggregate liability:
(a) in respect of all:
(A) Service Credits; and
(B) Compensation for Critical Service Level Failure;
incurred in any rolling period of 12 Months shall be subject in aggregate to the Service Credit Cap;
(b) in respect of all other Losses incurred by the Customer under or in connection with this Call Off Contract as a result of Defaults by the Supplier shall in no event exceed:
(A) in relation to any Defaults occurring from the Call Off Commencement Date to the end of the first Call Off Contract Year, five hundred thousand pounds (£500,000);
(B) in relation to any Defaults occurring in each subsequent Call Off Contract Year that commences during the remainder of the Call Off Contract Period, the higher of five hundred thousand pounds (£500,000) in each such Call Off Contract Year or a sum equal to one hundred and fifty percent (150%) of the Call Off Contract Charges payable to the Supplier under this Call Off Contract in the previous Call Off Contract Year; and
(C) in relation to any Defaults occurring in each Call Off Contract Year that commences after the end of the Call Off Contract Period, the higher of five hundred thousand pounds (£500,000) in each such Call Off Contract Year or a sum equal to one hundred and fifty percent (150%) of the Call Off Contract Charges payable to the Supplier under this Call Off Contract in the last Call Off Contract Year commencing during the Call Off Contract Period,
unless a different aggregate limit or percentage under this Clause (b) is stipulated by the Customer on the Order Form during a General Further Competition Procedure.
same as NSF32.2.1 Subject to Clause 32.1 (Unlimited Liability), the Supplier’s total aggregate liability:
(a) in respect of all Losses incurred by the Customer under or in connection with this Call Off Contract as a result of Defaults by the Supplier shall in no event exceed in relation to any Defaults occurring in a Call Off Contract Year, the higher of one hundred thousand pounds (£100,000) or a sum equal to one hundred and fifty percent (150%) of the Call Off Contract Charges paid and payable to the Supplier under this Call Off Contract in that Call Off Contract Year, unless a different aggregate limit or percentage under this Clause (a) is stipulated by the Customer during a Call for Competition Procedure.
Call Off Schedule 4, Part B,
Annex 2
AmberNone of the testing obligations of the DPS have ever been discussed (and they are significant). Many tests do not make sense, some examples:
* what is the security test on an HSCN connection?
* what are the ‘monitoring and alerting’ tests for VPNs?
* how can there be latency and jitter testing on an Internet connection?
not presentnot present[lots of test cases]
Call Off Schedule 4, Part B,
Annex 2, Sev 1
RedThis is different from NSF. This criteria is out of step with the agreements made during the HSCN Deed negotiations - a loss of resilience can not be a severity 1 error, neither can failing to hit a latency target.This is an error that causes non-recoverable conditions, e.g. it is not possible to continue using a Component, a Component crashes, there is database or file corruption, or data losssame as NSFThis is an error that causes non-recoverable conditions, e.g. it is not possible to continue using a Component, a Component crashes, the required resilience levels are not being achieved, the required latency is not being achieved.
Call Off Schedule 6,
Clause 3
AmberThese definitions of incident severity and fix/response times are different from previous agreements (inlcuding the HSCN obligations) and do not align with the definitions Schedule 4. Discussion is needed.[simple table of definations][hscn definations][new definations]
Call Off Schedule 6, Part A,
Clause 1
RedUnder NSF SLAs were due once the threshold was breached. Under this draft, despite thresholds being defined, SLAs are due when the target is breached.The Supplier accepts and acknowledges that failure to meet the Service Level Threshold set out in this Part A of this Call Off Schedule will result in Service Credits being due to the Customer.same as NSFThe Supplier accepts and acknowledges that failure to meet the Service Level Targets set out in this Part A of this Call Off Schedule will result in Service Credits being due to the Customer.
Call Off Schedule 6, Part A,
Clause 3.2 and 3.3.1
RedThreshold vs targetThe Supplier shall, at all times, provide the Services in such a manner that the Service Level Thresholds are achieved.same as NSFThe Supplier shall, at all times, provide the Services in such a manner that the Service Level Targets are achieved.
Call Off Schedule 6, Part A,
Clause 4.6
AmberThe is a new and onerous termnot presentnot presentWithin each Service Period, for each Integrated Service Instance Set and/or Standalone Service Instance where one or more Service Level Failures occur a Service Credit will accrue as fifteen percent (15%) of the Call Off Contract Charges specific to that Integrated Service Instance Set or Standalone Service Instance as applicable.
Call Off Schedule 6, Annex 1 to Part ARedThere are references to unmanaged HSCN connectivity, thresholds are defined but SLA payments are on breach of target, targets defined do not match (and are significantly more aggressive than) the targets specified in the HSCN obligations . There are separate targets for connections and WANs which creates a number of issues.

There are number of cases where the targets are simply impossible - no operator can meet them. For example:
* 99.95% availability on non-resilient DSL
* <5ms latency (HSCN is <=30)
* <1ms jitter on all classes (HSCN is <20ms, PSN was <=10ms on Real Time)
* 100% on incident fix times
* targets on internet connections
* SIP packet loss of <0.005% (PSN was <=0.1%)

The measurement metrics and calculation methods need a lot of attention
[nsf defination]same as NSF[complete rewrite]
Call Off Schedule 9, definition ‘Termination Assistance’RedClause (b) is in our opinion too broad, and that "any activity" presents an unqualifiable and potential unlimited set of requirements. We suggest that Suppliers should be able to set out the assistance options they shall offer - either as part of a service's definition or as options that Customers may procure separately.

This is particularly important because clause 41.5.1 now makes exit management a mandatory part of every service contracted via this vehicle.
means the activities to be performed by the Supplier pursuant to the Exit Plan, and any other assistance required by the Customer pursuant to the Termination Assistance Notice;same as NSFmeans:
a) the provision of any configuration information reasonably required to effect the implementation of the Replacement Services;
b) any activity required to facilitate the transition from the Live Operation of an existing Service to the live operation of a Replacement Service; and
c) the activities to be performed by the Supplier pursuant to the Exit Plan, required by the provisions of this Call Off Contract and any other assistance required by the Customer pursuant to the Termination Assistance Notice;

Please feedback to HSCN@innopsis.org if you share any of the above concerns.

We will invite those members who express a concern to a meeting to discuss.

Responses

The following response has been made

  1. Main Agreement Clause 6.1 ~ Non-Exclusive Assets
    1. I am not that clear on the issue here. I appreciate that there may be commercial sensitivity in shared core assets; however, if “reasonable information” (as is written in the clause) applies, then the Supplier is protected by relevance and commercial sensitivity. Have I missed the nub of the issue?
    2. Non issue.
    3. I can’t see the relevance of having information about Non-Exclusive Assets. It would be more helpful to ensure the incumbent provides information about assets which are transferable to a new supplier.
  2. Main Agreement Clause 17.6 ~ MI System
    1. Agree with this issue. An obligation to adoption of a new undefined “system” may imply significant cost and investment, which would be unreasonable.
    2. It will be very welcome to move forward from the present system. Without this clause we would not be able to take advantage of the new system when it becomes available. It is suggested that CCS agree to implement a new MI system with the approval of Suppliers, in which case this clause can stand as written.
    3. Apart from the use of “Best Endeavours” I don’t see a problem with this.
  3. Main Agreement Clause 20.2.2 ~IPR
    1. Agree with this issue. Removal of “subject to” is not a reasonable amendment to an otherwise agreed original term.
    2. Minor issue
    3. I think the concern is legitimate in general but I don’t think it has any real relevance to us.
  4. Main Agreement Schedule 2 Part A clause 3.1.3 ~Unmanaged connectivity
    1. Agree with this issue. “Unmanaged” is very much contrary to my understanding of HSCN and the Obligations we’ve all signed up to.
    2. HSCN has always stated that services can be both managed and unmanaged. Not an issue
    3. I agree with the concern. I have rasied this in converstaions with the HSCN team.
  5. Main Agreement Schedule 2 Part A clause 3.1.5 ~Pay As You Go
    1. Agree with this issue. This does not read as a contractual clause, more of a statement of potential. This should not be included in the terms at all.
    2. Pay as You Go is a potential offering and thus can be included.
    3. This has been well publicisied by the HSCN team. We raised it as an issue regarding the interconnect costs and a more reasonable cap was introduced. Not sure why this needs to be in the contract. Not a real issue.
  6. Main Agreement Schedule 4 Clause 2.1.1k ~ESPD
    1. Agree with this issue. This introduces ambiguity into the Agreement.
    2. Given the status of Brexit, it may not be appropriate to be tied to ESPD
    3. Understand the concern. Not sure it is a real issue for us.
  7. Main Agreement Schedule 9 Clause 4~Self audit
    1. In principle I agree with this issue, in that it should not be the Supplier’s responsibility to confirm the legitimacy of the procurement route selected by the Customer. However, I do not think this is an onerous clause.
    2. Minor issue
    3. This should only apply to orders over the OJEU threshold as local procurement rules vary between organisations for sums below the threshold.
  8. Call Off Clause 10.1~Critical Service Failure
    1. Agree with this issue. It is not clear how this is an improvement on the Network Service Framework.
    2. Tough, but workable
  9. Call Off Clause 32.2 ~Financial Limits
    1. I have read this clause as only applying to Default situations, in which it case it would be an improved clause. Have I interpreted this wrong?
    2. Not an issue
  10. Call Off Schedule 4 Part B Annex 2~ testing obligations
    1. Agree with this issue. What started as a guidance template in the NHS Digital HSCN Service Addendum pack, has turned into a detailed and potentially onerous set of testing definitions. This goes far further than RM1045.
    2. This will be factored into the cost of the service. If this is what the customer wants, there isn’t an issue.
    3. What is the reason for this to be introduced?
  11. Call Off Schedule 4 Part B Annex 3 sev1 ~testing obligation
    1. I have interpreted this differently, in that if the main link was not working, the testing scenario should prove that the resilient link takes over.
    2. Not an issue
  12. Call Off Schedule 6 Clause 3 ~Incident Definitions
    1. Agree with this issue.  Why has CCS deviated from NHS Digital and the HSCN Obligations? Since RM3825 is intended for HSCN only, as Suppliers we need to have consistency between it and the HSCN Obligations.
    2. We would prefer standard definition levels and not HSCN ones.
  13. Call Off Schedule 6 Part A Clause 1 ~Service Levels
    1. Agree with this issue. Subtly, or not that subtly, the bar has raised by changing from Threshold to Target.
    2. This will increase the costs. However, if the customer is will to pay, there is no issue.
    3. I think this is meant to stop suppliers offering a service that they know is not designed to meet the target and will take the service credit hit because the cost is likely to be less. My suggestion is that the requirement is the service is designed to meet the Service Level Target. That is what I have put in contracts when I’ve been buying networks.
  14. Call Off Schedule 6 Clause 3.2 and 3.3.1 ~Threshold vs Target
    1. Agree with this issue. Subtly, or not that subtly, the bar has raised by changing from Threshold to Target.
    2. As above
    3. Same comment as above
  15. Call Off Schedule 6 Part A 4.6 ~Service Credit
    1. Agree with this issue.
    2. This will increase the costs. However, if the customer is will to pay, there is no issue.
  16. Call Off Schedule 6 Annex 1 to Part A ~Service Level table
    1. Agree with this issue. The table is very onerous and goes much further than both RM1045 and the HSCN Obligations. Why deviate?
    2. This will increase the costs. However, if the customer is will to pay, there is no issue.
  17. Call Off Schedule 9 definition ~Termination Assistance
    1. Agree with this issue. Particularly for an SME, this could imply an open-ended requirement to offer assistance that it could not support.
    2. This has been normal in Government contracts and should be agreed prior to Contract. Not an issue.
    3. I agree with the concern.

%d bloggers like this: