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How can I avoid wasting time reviewing incomplete and inaccurate monthly reports?

6 June 2017

Issue

A project agreement will usually go into detail with regard to what each monthly report should contain. Ideally, there should be a monthly report for each of the services provided which are typically bundled into a single report.

Experience suggests the reports received do not always meet the requirements of the contract. Common problems include:

  • service failures not reported - or reported and excuses given as to why they are not failures
  • reports badged as ‘interim’ then revised and reissued several weeks later
  • terminology which does not match the project agreement
  • invoices which do not match reports, or have been incorrectly calculated.

Solutions

The project agreement should provide plenty of tools for Trusts to work with:

  • Dispute the report - there is typically a short window for the Trust to notify the Project Company of any errors or omissions in the report. Make sure you do this within the time stated. An email is usually sufficient If there has been an omission in the report, but you do not have much detail, write as much as you can so that, in any later dispute, you can credibly show you covered the issue to the best of your knowledge at the time.
  • Deduct both for the failure, and for the failure to report - every unreported service failure typically gives rise to two actual failures: the primary service failure, and the failure to report it. These should be reported separately and the Trust should make the non-reporting deduction as well as the primary service failure deduction. Please note - you may have to agree/determine whether there was a primary service failure in the first place before you can make the non-reporting deduction.
  • Pay the agreed amount but withhold the rest - if you disagree on how the invoice has been calculated, the project agreement typically allows you to pay the 'agreed' amount and withhold any disputed amount, pending resolution via the dispute procedure. If you calculate the monthly service payment is £1.8m, but the project company has invoiced £2m, then the agreed amount is £1.8m. The Trust can pay the agreed and wait and see if the project company serves a dispute notice for the remaining £200,000.

At Browne Jacobson we aim to deliver solutions to PFI problems and would delighted to discuss this or other solutions to any PFI issues you may have.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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