HSCN Access Framework (RM3825) terms and conditions


The current Draft terms and conditions for HSCN Access (RM3825) are now available.


Zip File containing all documents – CCCS RM3825 DPS Agreement Terms Documents DRAFT 17082017


Framework Agreement – (Draft)

Order Form (Draft)

Comment 1

The Q & A at the Supplier Event on 25th July stated that “Suppliers need to be stage 1 compliant to be able to bid for an opportunity and stage 2 at the point of award.” (See: https://www.innopsis.org/25/07/2017/hscn-supplier-event-25th-july-2017/)

In the Draft Agreement terms, Schedule 2, 2.7: “For the Supplier to tender to provide HSCN Connectivity Services, the Supplier must have successfully completed the HSCN Compliance stage 2 and been awarded the HSCN Assurance Mark”.

These are clearly conflicting positions.

The second position excludes all suppliers that have achieved Stage 1 Compliance and will be proceeding through Stage 2 Compliance when the first HSCN procurements are launched. We estimate this could affect over 50% of suppliers and therefore, rule out this significant proportion of the market.

Please confirm that the draft agreement terms will be amended to reflect the previous guidance to deliver the desired outcomes of a competitive marketplace for HSCN with minimal transition risk.

Comment 2

Call Off Contract version 0.6 DRAFT

There is no obligation on the the customer to have notified all potental participants that the procurement is underway. This is an opportunity to ensure that all procurements that fall under RM3825 are published at one publicaly available location.

Ensuring that there is a central register of all procurements means that compliance to DPS can be maintained and could ensure there is a consistency of reporting improving the CCS statistics and reducing the Management Information requirement on Suppliers and the subsequent cost to Public Sector.

Comment 3

The CCS publication on DPS says:

The DPS is to be used for “commonly used purchases…generally available on the market”. What does this mean?

Response: The rules do not specify how this should be interpreted. It is likely to depend on the specific type of goods, works or services covered by the DPS. The DPS will normally be suitable for largely “off-the-shelf” requirements which can be closely specified in advance. One-off, or heavily bespoke and / or highly complex requirements are unlikely to be suitable.”

There are a number of procurements waiting on this framework which are complex. They are not “off-the-shelf” requirements.

Comment 4

I can see that the principle of DPS could work well for small requirements for a single site or a small multiple of single sites. Ie customer wants HSCN connections to a handful of sites where there is no additional design required. What I can’t square this with is the 350 pages of contractual and supporting documentation. We have a 5 page order form for private companies ordering single HSCN connections which includes the mandatory clauses.


Comment 5

Stage 2 of the guidance says 10 days for suppliers to respond to call off requirements. For anything more than simple ADSL/FTTC services this is insufficient time to obtain best pricing. 15 days should be the minimum default with longer if any element of design is required.

Comment 6

Can the scope include WiFi? We are getting enquiries where GPs for example are looking to procure HSCN and WiFi from one supplier.

Comment 7

Unfortunately we have been unable to undertake a proper review of the terms due to the very short timescales and the holiday period.

Comments 8

Our main comment is that the terms appear to be based on the terms for RM1045 and are quite lengthy, at 109 pages for the framework agreement and 219 for the call-off.

Whilst this may well be suitable for the proposed aggregated procurements this seems overly onerous for situations where customers may want to purchase a small number of circuits and may be off-putting for those customers. It may also be off-putting for SMEs that do not have experience of delivering services via Public Sector Frameworks and will potentially introduce an overhead for suppliers in general as they may need additional contract and/or service management resource to ensure that the services are delivered in line with these terms rather than suppliers own terms and conditions.

Our suggestion to address this would be to either simplify these terms or to provide an alternative mechanism for procuring small numbers of circuits where suppliers would be able to provide the services on their standard terms and conditions with a contract variation that would ensure that HSCN obligations were met.

Comment 9

Agreement Terms, paragraph 6. The procedure for selecting suppliers for a General Further Competition refers to “Capable Suppliers”. The term capable suppliers, is shown in bold and italicized but is not defined in DPS Schedule 1 : Definitions.

The process appears to allow the Contracting Body to arbitrarily decide what a Capable Supplier is without an process or methodology for selection, surely the competition should be open to all suppliers on the DPS?

Comment 10

Clause 9 of the DPS agreement appears to suggest that the authority could require a Cyber Essentials certificate.

This seems odd considering that all suppliers must be Stage 1 Compliant.

Comment 11

There were a number of areas that our legal counsel flagged for further review, from an operational perspective, relating to performance, service credits, security etc, to ensure that the terms were reasonable. However, we have not had the opportunity to carry out this review and so have omitted that aspect of feedback on the basis that we expect those items to be reasonable and attainable by all compliant, competent providers.

Comment 12

Delay – If the Supplier becomes aware that there is reasonably likely to be a  Delay under this COC it shall notify the Customer within 2 working days (5.4.1) Business to record  requirement-  Would prefer to agree to notify the Customer within 5 working days for more flexibility under this clause.

Comment 13

Service Credits (SC- Clause 9.5 A are NOT the exclusive financial remedy for a Service Level Failure (page 17);

Would prefer that Service Credits are noted to be the exclusive remedy for the Customer under the Contract.

Comment 14

Critical Service Level Failure- Customer can retain as compensation a sum equivalent to any COC Charges, otherwise due to the Supplier and also has the right to Terminate the Contract and claim damages from the Supplier. (Cl 10.1) Supplier acknowledges that it has taken legal advice on the application of clause 10.1 and priced for risk when calculating the COC Charges;

Do not agree to inclusion of this clause

Comment 15

Charges and Payment – (Clause 20)  

Supplier to Indemnify Customer on a continuing basis in respect of Supplier’s failure to account for or to pay VAT;

Do not agree -prefer to delete clause

Comment 16

Customer can retain or set-off amounts owed to Supplier 4. Supplier shall make all payments due to Customer without any deduction or set-off. (page 24);

Would prefer to delete provision that Customer can retain or set off amounts owed to supplier (e.g mutual no set-off clause for both parties, Customer and Supplier)

Comment 17

Indemnity- Cl 20.5 –Supplier to Indemnify the Customer against Income Tax, NI and Social Security Contributions and any other liability, deduction, contribution, assessment of claim in connection with the provision of Services by the Supplier or any Supplier Personnel;

We do not agree to this Indemnity as too onerous/wide

Comment 18

Sub-Contractors/Supplier Personnel- Supplier to remain responsible for all acts and omissions of its sub-contractors;

Would prefer to delete this provision, or we will have to enter into back to back terms with any Sub-Contractors that we engage if included in the Contract.

Comment 19

Supplier Equipment – (Cl 29.5) Subject to any express provision of the BCDR Plan to the contrary, the loss or destruction for any reason of any Supplier equipment shall not relieve the Supplier of it’s obligations to supply Services in accordance with this COC, including Service Level thresholds;

We do not agree to this clause- suggest deletion.

Comment 20

P- Cl 30.2.3-  – The Supplier acknowledges and agrees that ownership of the media referred to in clause 30.2.2 (b) shall vest to the Customer upon receipt by Customer.” Cl 30.4.1- Customer has the right to freely sub-license rights granted pursuant to Cl 30.2 (Licenses granted by the Supplier: specifically written software and Project Specific IPR). Customer is entitled to freely assign, novate or otherwise transfer its rights and obligations under the License granted to it.

If possible suggest deletion of this clause.

Comment 21

IPR Indemnity- Supplier shall during and after the COC, Indemnify the Customer against all losses incurred by, awarded against or agreed to be paid by the Customer arising from an IPR Claim. Cl 30.9.3- Customer can Terminate the COC immediately and Supplier shall be liable for all unavoidable costs if the Supplier is unable to resolve the IPR claim in circumstances outlined in Cl 30.9.3;

If possible suggest deletion of this IP Indemnification Clause.

Comment 22

Confidentiality – Cl 31.4.10 – (pg 42) In event Supplier fails to comply with Clauses 31.4.2-31.4.5 re Confidentiality the Customer reserves the Right to Terminate the COC for Material Default;

We would prefer to agree to a mutual Confidentiality Clause.

Comment 23

Liability and Financial Limits Cl 33- (pg 47) (A) 1. Suppliers Total aggregate liability for (A) all Service Credits (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 Customer under or in connection with this COC as a result of Defaults by the Supplier shall not exceed (A) in relation to Defaults occurring from the COC CD to the end of the first COC Year £500,000 (B) in relation to defaults occurring in each subsequent COC year the higher of £500,000 or a sum equal to 150% of the COC Charges payable to the Supplier under the COC (unless any different aggregate limit/percentage is stipulated by the Customer on the Order Form)

Suggest mutual limitation of liability clause applicable to both parties.

Comment 24

Remedies and Relief- (Cl 35) Remedies if Supplier commits any Default of the COC. 1.) If Default is a Material Default capable of Remedy the Customer can (A) Instruct Supplier to comply with the Rectification Plan (B) Suspend this COC; (C) Terminate/suspend COC in respect of part of provision of the Services. Cl 35.1.2- Customer shall have the right to charge the Supplier for and the Supplier shall on demand pay any costs reasonably incurred by the Customer. 36 (d) –where the Supplier Non-Performance  constitutes a Service Level Failure  the Supplier shall not be liable to accrue Service Credits; –

Would prefer to amend so clause applies to  Material default by the Supplier only.

Comment 25

Termination and Exit Management- Cl 38.1 Termination on Material Default (e.g Supplier has HSCN Compliance rejected/ Supplier commits a crucial service level failure/representations/warranty is materially untrue or misleading/Material Default not capable of remedy;

ok  – but consider also reasonable for a mutual Termination right for Supplier for any material default by Customer

Comment 26

Customer Termination Rights  in relation to Financial Standing/Termination on Insolvency – Cl 38 – (and Financial Distress Schedule 5);

Ok – in relation to Insolvency. Do not agree Customer Termination right due to Financial Standing.

Comment 27

Customer Termination Rights  on Change of Control (Cl 38.4) – Customer may terminate COC when a Change of Control occurs (except where an approval was granted prior to the Change of Control);

Do not agree to this Clause , suggest Deletion

Comment 28

Customer Termination without Cause (Cl 38.5 )-Customer shall have the right to terminate the COC within 30 working days written notice to the Supplier;

Would prefer a mutual termination for convenience clause

Comment 28

Customer Termination Rights in relation to DPSA- Customer may terminate the COC if DPSA is terminated for any reason whatsoever (pg 57);

Ok – would prefer a mutual Termination right

Comment 29

Customer Termination rights by Customer in relation to Benchmarking/Variation/Promoting Tax Compliance (Cls 38.7/38.8/38.9);

Agree terminate right by Customer for promoting Tax Compliance only . mutual termination right if termination for failure to agree a Variation is included in the Contract.

Comment 30

Supplier Termination Rights- Cl 39.1 – Supplier may terminate the COC if Customer fails to pay an undisputed sum due to the Supplier under this COC which, in aggregate exceeds £5k and the amount is outstanding for 40 working days. Cl 39.2- Supplier shall not suspend the Supply of Services for the failure of the Customer to pay undisputed sums of money (whether in whole or part);

Agree – but would prefer alternative wording such as “Supplier may terminate the COC if Customer fails to pay an undisputed sum due to the Supplier under this COC, and the amount is outstanding for 30 calander days.”

Comment 31

Assignment – Cl  44.1 – supplier shall not assign rights, obligations , liabilities under this COC without approval. Cl 44.2- Customer may assign under COC-

We would prefer a mutual non-assignment clause.

Comment 32

Charges – Schedule- COC Charges can not be increased during the COC period.

We would prefer a mechanism/further wording  to be included in this clause where charges can be increased if this is required due to unforeseen circumstances.

Comment 33

Test Specification (Cl 9.8) If a Milestone is not achieved the Customer shall be entitled to recover from the Supplier, any reasonable additional costs it may incur as a direct result or further review or re-testing of a milestone.

We would prefer deletion of this provision as Customer can charge any further costs to Supplier.

Comment 34

It shall constitute a material default where the failure to satisfy the Test Success Criteria results, or is likely to result in the Supplier failing to meet a milestone (Cl 13.2.3);

ok – if Testing Criteria is reasonable.

Comment 35

Critical Service Level Failure-  11A – A Critical Service level Failure (CSLF) will occur if the performance of the Services fall below the same Service failure threshold on 3 occasions in any six (6) consecutive service Periods. In event of CSLF Customer shall be entitled to terminate the COC for Material Default.

Ok- but would prefer the number of occasions of a Critical service level failure to be increased to five.

Comment 36

Security – Schedule 7 If any Security breach reveals an actual or potential breach of security such circumstance shall constitute a material default of the COC. ISMS must maintain compliance with ISO 27001. (pg 135)  

ok – if security schedule reasonable – infosec review

Comment 37

Non-Solicitation – Cl 10 Supplier shall not from 12 months from date of transfer re-employ or re-engage or entice any employees, suppliers or sub-contractors whose employment or engagement is transferred to the Customer and/or the Replacement Supplier; Would prefer not to agree Indemnification Clause at 9.9.

We can agree Non-Solicitation clause but would prefer the time period to be six months , rather than 12 months.

Comment 38

Schedule 15- Covers situation where the provision of the Services or each relevant part of services is and is not a Relevant Transfer in relation to Transferring Customer Employees and where there are no Transferring Employees and obligations.

Extensive Supplier obligations included/indemnities may would prefer not to agree/delete.

Comment 39

Supplier to also ensure that any Sub-Contractors also comply with the provisions in this clause.

We would prefer for this clause to be deleted or ensure that we have back to back contracts with any Sub-Contractors that we engaged.

Comment 40

Dynamic Purchasing System Agreement – Clause 8

What is the basis for requiring a Guarantee from the Supplier for entrance to a Dynamic Purchasing System in which Services will be procured under separate Call Off Terms?  What will be the basis of assessing the requirement?  Usually assessment is based upon the financial standing of the Supplier which under (a Dynamic Purchasing Agreement) can serve no practical purpose.  If financial standing is the basis for assessment, then it is fair to say that larger corporate organisations are unlikely to be required to provide a Guarantee and the requirement to provide a Guarantee is likely to be present as a bar to SMEs from applying.  We suspect that the later does not accord with NHS Digital’s intention in this regard. Will the Authority please advise on what basis it intends to exercise its rights in this regard?

Comment 41

Dynamic Purchasing System Agreement – Cause 24.3

We refer to:

24.3       Subject to Clause 24.1, each Party’s total aggregate liability in respect of all Lossesincurred under or in connection with this Dynamic Purchasing System Agreement as a result of its defaults shall in no event exceed:

24.3.1    in relation to  any defaults occurring from the DPS Commencement Date to the end of the first Contract Year, one hundred thousand pounds (£100,000);

24.3.2    in relation to any defaults occurring in each subsequent Contract Year…..

The drafting at Clause 24.3 and Clause 24.3.1 (and Clause 24.3.2 and Clause 24.3.3) is at odds. Clause 24.3 states “total aggregate liability” in respect of “all liability” yet Clause 24.3.1 to 24.3.3 speak in terms of “any default”.  Will the Authority confirm that Clauses 24.3.1 to 24.3.3 are intended to catch each party’s total liability in each Contract Year i.e. liability in respect of all defaults in a Contract Year and not each single default occurring in a Contract Year. In the interests of certainty can the drafting be amended to read “all defaults”?

Comment 42

Call Off Terms – Clause 33.3(b)

We refer to

(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);

The drafting at Clause 33.2(b) and Clause 33.2(b)A and Clause  33.2(b)B and Clause 33.2(b).C) is at odds. Clause 33.2(b) states “total aggregate liability” in respect of “all liability” yet Clause 33.2(b)A, Clause 33.3(b) B and Clause 33.2(b)C speak in terms of “any Default”.  Will the Authority confirm that Clauses  33.2(b)A to 33.(b)C are intended to catch each party’s total liability in each Contract Year i.e. liability in respect of all Defaults in a Contract Year and not each single Default occurring in a Contract Year. In the interests of certainty can the drafting be amended to read “all Defaults”?

Comment 43

Call Off Terms – 33.2(b)

Will the Authority please cap the Supplier’s liability in each Contract Year to 150% of the annual Charges and remove the second (higher of) cap of £500,000K.  The inclusion of the second £500,000K has the potential to make the limitation on the Supplier’s liability on the low value Call Off Contracts wholly disproportionate forcing Suppliers to include a higher level of contingency to account for the exposure in their prices. This will deter Suppliers from completing for the low value Call Off Contracts (i.e. one or two circuits. This is simply not in the interests of those smaller organisations wanting to procure HSCN Services. If the cap on liability is kept at a percentage of the annual Charges this allows liability to be relative and proportionate to the value of the Call Off Contract.


Comment 44

Order Form – Section B – Last Row – Additional Clause “Other” required

It is assumed that this is where the Customer includes in the Order Form any additional terms or amendment to the Call Off Terms that it requires. Is this correct? The reference here states “See DPS Agreement Schedule 5, clause 4.1”. There is no Clause 4.1 in Schedule 5 (Award Criteria). What is the correct reference here please?

Comment 45

Our comments are necessarily brief and high level given the extremely short timescales and lack of notice provided by CCS. If they want useful input from industry they must give more time to assess what is a complex and important initiative.

Comment 46

We wonder whether CCS is taking this exercise seriously, since we haven’t had any responses to the comments we made previously, and now we have only four days for further comments….

Comment 47

TUPE & Pensions. There is apparently a significant delta between NSF and the proposals for the DPS regarding TUPE & pensions. We haven’t had time to properly assess the impact of this – but we query why this is the case. TUPE provisions can act as a significant dis-incentive for industry to bid aggressively – given that they must allow for potentially significant (but often not understood at bid stage) TUPE costs. We wonder what the driver for this was.

Comment 48

HSCN Supplemental Terms – reasonable to insert them, but we haven’t had time to check that they match those in the Obligations Framework and/or Deed.

Alignment of incident severities to HSCN definition – ditto comments above.

Comment 49

Financial standing and/or the credit rating of a Key Sub-Contractor. A change in the financial standing of the prime supplier, or the supplier’s sub-contractors can lead to a default. Why is this different to NSF? Why is the financial standing of the supplier’s sub-contractor a problem for anyone except the  prime supplier? This proposal increases the risk and complexity for the prime supplier, which will need to be priced in the commercial offer.

Comment 50

Open book threshold is now at £250k (NSF was £3m). Open book accounting can lead to significant overheads to suppliers – especially when they have built processes and governance structures to be aligned with NSF obligations. Why the substantial delta to NSF thresholds? And why does CCS think that open book accounting is so important (in our experience it doesn’t drive a better commercial model or commercial behaviour from industry, and can often add significant overhead)?

Comment 51

Marketing obligation for the DPS. This is a reasonable addition, but we haven’t had time to assess the detail behind the requirements. While suppliers will naturally want to promote the vehicle, we must ensure that the obligations aren’t overly onerous, and that they don’t conflict with other obligations for other vehicles.

Comment 52

Email notices. The use of email for noticing is notoriously risky – people change roles, people leave organisations, people change email addresses, email boxes fill up. Why does CCS feel that this is necessary, and a good idea?

Comment 53

Term/Call Off Initial Period – The contract term should start from acceptance of the respective connection i.e. the connection being ready for service rather than contract signature.

Comment 54

Termination for convenience: We would not be able to accept termination for convenience. We would be incurring costs in installing network which we would not be recovering until we have received the revenue for all of the connections over the initial term of the agreement and any early termination will need to be subject to payment of all outstanding charges for the remainder of the applicable term;

Comment 55

Termination rights: Certain termination rights contained in the call off terms will not be relevant to ourselves (eg change of control/breach by the supplier of the terms of the call-off contract) and should not be extended to us. We should not be liable to pay damages for termination in such circumstances;

Comment 56

Right to suspend service: If payment is not being made for the service, we will need to be able to suspend service;

Comment 57

Security Interests/Encumbrances: We may have lenders who take security rights over our assets (albeit without affecting our performance of the agreement);

Comment 58

Benchmarking: Our level of concern around benchmarking is linked to the commercial structure of the deal as there are upfront investments to account for;

Comment 59

Financial Distress: If we are to be considered a ‘Key Sub-contractor’ under the contract, we may be subject to credit rating reviews by the Customer which could lead to us being required to attend meetings, draw up a correction plan and comply with it or risk termination. Any credit rating reports will rely on historic information which is unhelpful for us given we are a young company;

Comment 60

Insurance: We have insurance policies in place, but we do not take out bespoke ‘all risks’ policies for specific customer contracts;

Comment 61

Exit management: We could continue to grant access to the fibre during a period after contract expiry, provided we are continuing to be paid for the use of the fibre. We would not, however, be able to transfer ownership of our fibre under the agreement;

Comment 62

Assignment: We would need to be able to assign our rights under the agreement to another group company and to a lender without restriction;

If you have any feedback, you can either send this direct to CCS at nsprojects@crowncommercial.gov.uk or complete the form below.


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