PRISON MANAGEMENT CONTRACT FOR MT EDEN CORRECTIONS FACILITY

Transcription

1 PRISON MANAGEMENT CONTRACT FOR MT EDEN CORRECTIONS FACILITY between HER MAJESTY THE QUEEN IN RIGHT OF NEW ZEALAND ACTING BY AND THROUGH THE CHIEF EXECUTIVE OF THE DEPARTMENT OF CORRECTIONS and SERCO NEW ZEALAND LIMITED Page 1

2 TABLE OF CONTENTS 1. CONTRACTOR ROLE AND HIGH LEVEL OBJECTIVES CONDITIONS TERM OF THE CONTRACT FUTURE ACCOMMODATION POLICIES AND PROCEDURES GENERAL OBLIGATIONS SPECIFIED ENTITIES AND OFFICIAL VISITORS PERFORMANCE MANAGEMENT WARRANTIES FEES PAYABLE FOR THE SERVICES INVOICING AND OTHER OBLIGATIONS RELATING TO PAYMENTS EQUIPMENT AND CONSUMABLES INFORMATION TECHNOLOGY REQUIREMENTS USE OF CONTRACT PRISON MAINTENANCE, REPAIR AND REPLACEMENT CONTRACTOR PERSONNEL HEALTH & SAFETY TRAINING REQUIREMENTS SUBCONTRACTING PRISON INDUSTRIES MONITORING AND AUDIT REPORTING AND INFORMATION REQUIREMENTS INDEMNITIES DISPUTE RESOLUTION PERFORMANCE NOTICES AND RECTIFICATION LIMITATIONS OF LIABILITY FORCE MAJEURE STEP-IN TERMINATION DISENGAGEMENT CHANGES TO THE CONTRACT INTELLECTUAL PROPERTY RIGHTS IP INDEMNITY CONFIDENTIALITY RECORDS AND RECORDKEEPING INSURANCE REQUIREMENTS NOTICES GENERAL DEFINITIONS AND INTERPRETATION SCHEDULES SCHEDULE 1 WORKING TOGETHER SCHEDULE 2 PRISON MANAGEMENT SERVICES SCHEDULE 3 PERFORMANCE MANAGEMENT FRAMEWORK SCHEDULE 4 PRICING SCHEDULE 5 INFORMATION PROVISION AND REPORTING SCHEDULE 6 FORM OF PARENT GUARANTEE SCHEDULE 7 TRANSITION PLAN SCHEDULE 8 DISENGAGEMENT PURCHASE OPTION TERMS SCHEDULE 9 MANDATORY PPM REQUIREMENTS SCHEDULE 10 MANDATORY SERVICE PROVIDERS SCHEDULE 11 COMMUNICATIONS REQUIREMENTS SCHEDULE 12 CHIEF EXECUTIVE REQUIREMENTS Page 2

3 SCHEDULE 13 ACCESS NOTICES SCHEDULE 14 INVOICING REQUIREMENTS SCHEDULE 15 INSURANCE REQUIREMENTS SCHEDULE 16 CROWN APPLICATIONS SCHEDULE 17 SITE PLANS SCHEDULE 18 CROWN EQUIPMENT AND FIXED ASSETS SCHEDULE 19 FM SERVICE LEVELS Page 3

4 AGREEMENT DATED PARTIES 1. HER MAJESTY THE QUEEN IN RIGHT OF NEW ZEALAND acting by and through the CHIEF EXECUTIVE OF THE DEPARTMENT OF CORRECTIONS (Crown) 2. SERCO NEW ZEALAND LIMITED (Contractor) INTRODUCTION A. On 24 May 2010 the Crown issued a "Request for Proposal" to qualified suppliers, including the Contractor, for the provision of prison management services at the Contract Prison (Request for Proposal) and certain ancillary prisoner Escort Services. B. The Contractor has held itself out to the Crown as having the best credentials to provide services meeting the Crown's requirements as set out in the Request for Proposal. C. Based on the Contractor's response to the Request for Proposal and other supporting information provided by the Contractor, the Crown has selected the Contractor to provide the Services. This agreement sets out the terms and conditions upon which the parties have agreed the Contractor will provide the Services to the Crown. AGREEMENT PART I OBJECTIVES AND SERVICES 1. CONTRACTOR ROLE AND HIGH LEVEL OBJECTIVES 1.1 Contractor to perform the Services: The Contractor agrees to perform the Services in accordance with, and on the terms set out in, this agreement, except that the Contractor is only required to perform the Prison Management Services on and from the ACRP Handover Date. 1.2 Nature of the relationship between Contractor and the Crown: This agreement is entered into by the Crown under sections 166(1) and 198(1) of the Corrections Act, and is both a security contract and a prison management contract (each as defined in the Corrections Act) and as such: the Contractor is both a "security contractor" and a "contractor" for the purposes of the Corrections Act; the relationship of the Contractor to the Crown is that of an independent contractor to its customer; Page 4

5 (c) (d) (e) except as provided in clause 14.6, nothing in this agreement will constitute either party as the partner, agent, employee or officer of, or as a joint venturer with, the other party; the Contractor acknowledges that it does not have the authority to enter into contracts or incur debts on behalf of the Crown, the Department or the Chief Executive; and neither party will make any contrary representation to any other person. 1.3 Contractor acknowledgements: The Contractor acknowledges that: it has made its own independent assessment of, and has relied on its own enquiries and investigations as to: (i) (ii) (iii) (iv) the Land, the Buildings and Fixtures proposed to form part of the Contract Prison, the Electronic Security System and the Crown Equipment; all matters that are the subject of this agreement; the nature and extent of the risks assumed by it under this agreement; and the quantity, quality, nature and extent of Resources necessary to enable it to deliver the Services to the performance standards, and otherwise as required for the performance of its obligations, under this agreement; (c) (d) (e) it has relied on its own experience, skills and judgement and has not relied on any representation made, or information provided to it, by the Crown that it has not itself independently verified, other than the warranties set out in clause 9.1; the obligations of the Contractor and its Personnel under this agreement must be read together with the Corrections Act and other applicable Laws, and, although this agreement increases the obligations of the Contractor and its Personnel in places, it does not lessen or remove obligations in the Corrections Act or other Laws; performance of the Services in accordance with the standards specified in this agreement is of critical importance to the Crown and of public interest, and that any failure to perform the Services to these standards may result in reputational damage for the Crown, the Chief Executive or the Minister or in one or more of them incurring legal liability; and that the Crown has no obligation to place a specific type or number of prisoners under the control of the Contractor for the purposes of this agreement and may remove any or all Prisoners from the control of the Contractor at any time for any reason. 1.4 Objectives of the agreement: The Crown's objectives in entering into this agreement are: to obtain, on an ongoing basis, increased efficiency and effectiveness in prison management that will deliver sustainable cost savings and service improvements; Page 5

6 (c) (d) (e) to create opportunities for Māori and New Zealand businesses to contribute intellectual, human or financial resources to the delivery of prison management services by the Contractor at the Contract Prison; to improve public safety by ensuring sentence compliance and reducing re-offending; to facilitate the use of private sector initiative and innovation in prison management to improve service delivery and reduce costs; to achieve improvements in service delivery and reductions in costs in relation to the Contract Prison that continue to equal or better the Department s delivery against its Vote Objectives, which for the 2010/11 Year are that: (i) (ii) (iii) (iv) (v) "compliance with sentences and orders is ensured"; "re-offending is reduced"; "offenders are managed safely and humanely"; "sentencing options are used effectively"; and "victims of crime are supported"; (f) (g) (h) that the Services are delivered in a manner that is cognisant of the cultural aspects of New Zealand s tangata whenua and that fosters greater connectivity and alignment of the Services with these aspects to deliver better outcomes for Māori; to provide mechanisms for adequate monitoring and evaluation in order to determine whether the implementation of the Government's policy in contracting out prison management has been successful; and that the Contract Prison is operated in a way that is consistent with the Department's key strategies and the purpose of the corrections system set out in section 5(1) of the Corrections Act and the principles guiding the operation of the corrections system set out in section 6(1) of the Corrections Act. 1.5 Relationship principles: The parties will behave and work together, in relation to all aspects of this agreement and the delivery of the Services, in a manner that is consistent with the following relationship principles: (c) Service approach The focus for service delivery will be performancebased achievement of the outcomes sought by the Crown, consistent with the Objectives. Teamwork The Department and the Contractor will operate as a team, tasked with delivering the Crown s outcomes and objectives (including the Vote Objectives). Communication will be open and honest. Each party will respond quickly and proactively to issues raised by the other, and both opportunities and solutions to problems will be shared. Risk sharing Clear accountabilities will be maintained. The Contractor acknowledges that while it is contractually accountable for the management of its operational and custodial risks, the Crown carries ultimate responsibility to Prisoners and the public for the delivery of the Page 6

7 Services at the Contract Prison. This will require both parties to cooperate in the resolution of issues that may impact risk. (d) (e) (f) Service evolution The Services will need to evolve over time in response to service delivery changes across the whole of the corrections system and the Contractor will need to respond to these changes. Innovation The parties will be proactive in seeking innovation in all aspects of Service delivery at the Contract Prison. Transparency Transparency is a fundamental requirement in relation to all operational information and matters at the Contract Prison, including incident reporting. 1.6 Purpose of objectives and relationship principles: Clauses 1.4 and 1.5 are intended to reflect objectives and relationship principles that underpin the way in which the parties will work together in relation to the Contractor's delivery of the Services. They are not intended to define or expand the scope of, or to alter the plain meaning of, either party's obligations. However, to the extent the agreement does not address a particular circumstance or is otherwise unclear or ambiguous, it is to be interpreted so as to give full effect to the Objectives and relationship principles. 1.7 Working together: The parties must comply with their respective obligations set out in Schedule CONDITIONS 2.1 Documents to be provided by Contractor: The Contractor must, by no later than 5:00pm on the Condition Date, deliver to the Crown all of the following documents: the Parent Guarantee duly executed by all parties to it; and the documentation relating to insurance required under clause Benefit of Clause 2.1: Clause 2.1 has been inserted solely for the benefit of the Crown and the Crown may at its absolute discretion, by notice to the Contractor, waive the requirement for the Contractor to deliver to it any of the documents referred to in clause Crown's right to terminate: If the documents required to be provided by the Contractor under clause 2.1 are not delivered to the Crown, on or before 5:00pm on the Condition Date, and delivery has not been waived in accordance with clause 2.2, before 5:00pm on the Condition Date, the Crown may, by notice to the Contractor, terminate this agreement at any time prior to having received those documents. If such a notice is given, this agreement will be of no further effect and both parties will, subject to clause 29.5, be released from all further obligations under this agreement. Page 7

8 3. TERM OF THE CONTRACT 3.1 Initial Contract Term: This agreement commences on the Commencement Date and, unless terminated earlier, terminates on the Scheduled Expiry Date. 3.2 Termination on Break Date: If either party delivers a Break Notice to the other party at any time before the fifth anniversary of the New Facilities Handover Date, or if the parties are deemed to have delivered Break Notices to each other under clause 3.4, this agreement will terminate on the Break Date. 3.3 Review: The parties acknowledge that certain terms of this agreement, including the pricing of the Services, may need to be amended, with effect from the Break Date, if the Contract Term is to continue past the Break Date. Accordingly, either party may, at any time after the fourth anniversary of the New Facilities Handover Date, initiate a review of the terms of this agreement to apply after the Break Date. 3.4 Deemed delivery of Break Notices: If the parties have not, by the fifth anniversary of the New Facilities Handover Date: agreed, in accordance with clause 38.3, any amendments to the terms of this agreement to apply from the Break Date; or each confirmed to the other, in writing, that no change to this agreement is required for the period from the Break Date to the Scheduled Expiry Date, each party will be deemed to have delivered a Break Notice to the other. 4. FUTURE ACCOMMODATION 4.1 Future Accommodation Plan: If the Crown determines to proceed with the construction of the Future Accommodation and this construction is to be completed, and the Future Accommodation used, during the Contract Term, the Contractor must, by the date 6 months before the date notified to the Contractor by the Department as being the date by which construction of the Future Accommodation is scheduled to be complete, develop and obtain the Crown's approval for a detailed plan (Future Accommodation Plan) for the Contractor to take over operational control of the Future Accommodation when its construction is complete, integrate the Future Accommodation with the rest of the Contract Prison, and manage the build-up of Prisoners in that Future Accommodation (together the Future Accommodation Implementation). The Future Accommodation Plan must (without limitation) include: (c) (d) a timetable for the Future Accommodation Implementation; the tests and verification to be carried out to ensure the Future Accommodation is suitable; the tests of operational readiness to be carried out before Prisoners are accommodated in the Future Accommodation; the additional Resources the Contractor will need to acquire to accommodate Prisoners in the Future Accommodation and manage the larger number of Prisoners which will result from the increased prison capacity; Page 8

9 (e) (f) (g) (h) the obligations the Contractor will need to perform to carry out the Future Accommodation Implementation, and the consequences for the Contractor if it breaches those obligations; the inputs that will be required from the Crown; the rate at which the build-up of Prisoners will be able to occur; and the way in which the Future Accommodation Operational Commissioning Start Date and the Future Accommodation Operational Commissioning End Date will be determined. 4.2 Crown assistance: The Crown acknowledges that the Contractor will need assistance from the Crown to develop the Future Accommodation Plan under clause 4.1, and will provide such assistance as is reasonably required for the Contractor to be able to develop that plan and obtain Crown approval. 4.3 Increased Fees in relation to Future Accommodation: To the extent that the Contractor estimates a change to the Fees in relation to the Future Accommodation Implementation Services and the provision of the Prison Management Services for the Future Accommodation, the Contractor shall prepare a report within 20 Working Days of receiving notice from the Crown that it wishes to proceed with the Future Accommodation. That report will set out the information provided for in clauses 31.8(c) and 31.8(d) as if the addition of the Future Accommodation was a Change, and clauses 31.9 and to will apply similarly. 5. POLICIES AND PROCEDURES 5.1 Policy and Procedures Manuals: The Contractor must develop and maintain manuals (Policy and Procedures Manuals), which contain policies, plans and procedures that: are sufficient and suitable to cover all aspects of delivery of the Services in accordance with this agreement; and without limiting clause 5.1, meet the Mandatory PPM Requirements. 5.2 Finalisation of Policy and Procedures Manuals: The Contractor must finalise its Policy and Procedures Manuals and provide them to the Crown in accordance with the timing and other requirements specified in Schedule 7 and the Transition Plan. 5.3 Services to be provided in accordance with Policies: Subject to clause 5.5, the Contractor must: ensure the Services are performed in accordance with the Policy and Procedures Manuals; and put systems in place to monitor its compliance with the Policy and Procedures Manuals, so that it is able to identify and rectify any areas of non-compliance. 5.4 Amending Policy and Procedures Manuals: The Contractor may amend the Policy and Procedures Manuals, provided that: Page 9

10 (c) the Policy and Procedures Manuals must at all times contain policies, plans and procedures that are sufficient and suitable to cover all aspects of performance of the Services in accordance with this agreement; without limiting clause 5.4, the Policy and Procedures Manuals must at all times meet the Mandatory PPM Requirements; and the Contractor must promptly notify the Crown of any amendment to the Policy and Procedures Manuals. 5.5 Precedence: If there is any inconsistency between the provisions of this agreement and the Policy and Procedures Manuals, the provisions of this agreement (other than clause 5.3) will prevail. 5.6 Contractor's obligations not affected by approval: The Contractor acknowledges that any approval by the Crown of the Policy and Procedures Manuals (whether express or implicit): does not relieve the Contractor of any of its obligations under this agreement; and is not acceptance by the Crown that compliance with the Policy and Procedures Manuals will constitute compliance with the Contractor's obligations to perform the Services in accordance with this agreement (save as to compliance with clause 5.3) or that the Policy and Procedures Manuals contain policies, plans and procedures that are sufficient and suitable to cover all aspects of delivery of the Services. 5.7 Update of the Mandatory PPM Requirements Table: The Crown may change the Mandatory PPM Requirements Table by giving notice of the relevant change to the Contractor, provided that it may give such notice only if: (c) the change to the Mandatory PPM Requirements Table does not require the Contractor to change its then current Policy and Procedures Manuals (though it will have the effect of restricting future changes by the Contractor to its Policy and Procedures Manuals); the change is made before the ACRP Handover Date, and is a change which adds detail to, but does not widen the scope of, the items included in the Mandatory PPM Requirements Table set out in Schedule 9; or the change to the Mandatory PPM Requirements Table is made in accordance with clause GENERAL OBLIGATIONS 6.1 General notification requirements: The Contractor must promptly notify the Crown and, in the case of clause 6.1(e), the Primary Monitor and the Security Monitor, of: (c) the occurrence of any Termination Event; any breach of the Contractor's obligations under this agreement; any matter which may impact on the Contractor's ability to perform its obligations under this agreement; Page 10

11 (d) (e) (f) any legal proceedings brought against the Contractor or its Personnel, and any written threat to bring legal proceedings against the Contractor or its Personnel, which relate in any way to the Services or the Contract Prison; any variation of the controlling interests of the Contractor; and any matter which it becomes aware of, which could cause: (i) (ii) legal proceedings to be brought against any of the Crown, the Chief Executive or the Crown's Personnel; or a formal complaint to be made against the Crown, the Chief Executive or the Crown's Personnel to the Ombudsman, the Privacy Commissioner, or any other regulatory authority, and which relates in any way to the Services or the Contract Prison; and (g) any event (other than the receipt of a Performance Notice or an Unremedied Default Notice) which means that a Specific Deduction is able to be made under Schedule Conflicts of interest: The Contractor must avoid any conflicts of interest that might arise in relation to the exercise or performance by the Contractor or any of its Personnel of any power, duty or function conferred or imposed by or under this agreement, or by or under the Corrections Act or any other Law. 6.3 Compliance with Laws, and international obligations: The Contractor must: at all times comply with all Laws, including the requirements of: (i) (ii) (iii) (iv) (v) the Corrections Act, in so far as those requirements are applicable to the Contractor, the Contract Prison, any Prisoner or the Services; any instructions or guidelines issued by the Chief Executive under section 196 of the Corrections Act, in so far as those requirements are applicable to the Contractor, the Contract Prison or the Services; the New Zealand Bill of Rights Act 1990, as if the Contract Prison were a prison managed by the Department and the Contractor and any Personnel were employees of the Chief Executive; the Public Records Act, as if the Contractor were a part of the Department, and the records relating to the Contract Prison and to the Prisoners were records created or received by the Department; and sections 56(1) and (2) and section 58(3) of the State Sector Act 1988 (which relate to personnel and equal employment policies), as if the Contractor were the chief executive of a department within the meaning of that Act and as if those requirements applied, not only in respect of employees of the Contractor, but in respect of all Staff Members of the Contract Prison; Page 11

12 (c) (d) (e) (f) (g) (h) (i) ensure that, where any Law requires that a right or entitlement be granted to a Prisoner, the Contractor grants that right or entitlement to the Prisoner, unless the Law expressly makes another person responsible for granting that right or entitlement or, subject to clause 6.3, the granting of the right or entitlement is beyond the Contractor's reasonable control; ensure that, where any Law gives a right or entitlement to any other person in relation to the Contract Prison or a Prisoner, the Contractor does not do anything which would deny that right or entitlement; ensure that, where any Law requires that something be done at the Contract Prison, or imposes any requirement in relation to the Services, that thing is done or the Services are carried out in accordance with that requirement (as applicable), unless the Law or this agreement expressly makes another person responsible for having that thing done or meeting that requirement (as applicable); ensure that its Personnel comply with all Laws relevant to the performance of the Services, including their obligations under the Corrections Act; ensure that its Personnel exercise any powers granted to them in accordance with any applicable guidelines issued by the Chief Executive under section 196 of the Corrections Act; obtain and maintain all Authorisations required by Law in order for it to perform the Services, other than Crown Consents; not, by any act or omission, and ensure that its Personnel do not, by any act or omission, cause the Crown or the Chief Executive to breach any Law; and comply with all international obligations and standards, relevant to the Contract Prison, any Prisoner or the Services. 6.4 Chief Executive requirements: The Contractor must perform the obligations set out in Schedule Contract Prison deemed part of Crown for certain purposes: The Contractor acknowledges that: (c) for the purposes of the Ombudsmen Act 1975 and the Official Information Act 1982, the Contract Prison is to be treated as part of the Department; in relation to the carrying out of escort duties (as defined in the Corrections Act), the Contractor and every Security Officer employed by it, is to be treated, for the purposes of the Ombudsmen Act 1975 and the Official Information Act 1982, as an employee of the Department; and the Department may receive requests from time to time under the Ombudsmen Act 1975 and/or the Official Information Act 1982 to provide certain information or documents or papers or things in relation to the Contractor, the Contract Prison or the Services. Without limiting clause 22.3, the Contractor must: Page 12

13 (d) (e) provide whatever information is requested by the Department, within the timeframes required by the Department, to allow the Department to comply with those Acts and any requests made under those Acts; and comply with any agreement between the Chief Executive and the Chief Ombudsman which is entered into under section 160 of the Corrections Act and which the Crown has disclosed to the Contractor, to the extent that it applies to the Contract Prison or the Services as if the Contractor were the Department (or Chief Executive, as the case may be) under any such agreement. 6.6 Co-operation with other agencies: The Contractor must: (c) (d) at all times in the performance of the Services, work co-operatively with the Department, other government agencies and relevant nongovernmental organisations; except to the extent the Crown directs it not to, comply with each Memorandum of Understanding as if each reference in that Memorandum of Understanding to the Department was a reference to the Contractor; work with the Department and managers of other corrections prisons (as defined in the Corrections Act) to co-ordinate the services and processes of the Contract Prison with those other corrections prisons, including to co-ordinate those services and processes to the extent necessary to implement the requirements of sections 47 and 48 of the Corrections Act (which relate to security classifications); and work with the Department, the Police, other government agencies, and other Security Contractors to co-ordinate the services and processes relating to the Escort Services provided by the Contractor with those of the Department, the Police, other government agencies, and other Security Contractors. 6.7 Working with Pacific peoples, iwi and the local community: The Contractor must: (c) (d) use its best endeavours to maintain an ongoing and productive relationship with the mana whenua group and other Māori groups, Pacific peoples groups and other community and public interest groups that, in each case, have a legitimate interest in the Contract Prison or the Services; without limiting clause 6.7, consult on a regular basis with each of the groups referred to in clause 6.7, to ensure their interests are taken into account in relation to performance of the Services; without limiting clauses 6.7 and, act at all times in a manner which is open, fair and transparent with all of the groups referred to in clause 6.7; and keep the Department informed of any issues relating to the Contract Prison or the Services which are of concern to any of the groups referred to in clause 6.7. Page 13

14 6.8 Obligations to use particular contractors and suppliers: The Crown may from time to time require certain services or supplies required by the Contractor in the performance of the Services (Mandatory Services) to be provided by a Mandatory Service Provider. Subject to clause 6.10, the Contractor must procure all Mandatory Services from the Mandatory Service Provider identified for those Mandatory Services in the Mandatory Service Provider Table. 6.9 Update of the Mandatory Service Provider Table: The Crown may, at any time, change the Mandatory Service Provider Table by giving notice of the relevant change to the Contractor. If a change to the Mandatory Service Provider Table would require the Contractor to breach any contract with an existing supplier of goods or services, the Contractor is not required to breach that contract, but must use reasonable endeavours to fully comply with clause 6.8 without breaching that contract as soon as is reasonably practicable Mandatory Service Provider complaint: If the Contractor is dissatisfied with the services or supplies provided by a Mandatory Service Provider, it may give notice to the Crown of such dissatisfaction, with supporting reasons (Mandatory Service Provider Complaint Notice). If the Crown receives a Mandatory Service Provider Complaint Notice, the Crown: will use reasonable endeavours to investigate the issues raised in the Mandatory Service Provider Complaint Notice and if, following such investigation, the Crown (acting reasonably) concurs with the Contractor that there are reasonable grounds for the Contractor's dissatisfaction, use reasonable endeavours to have those issues resolved to the satisfaction of the Contractor; or may agree to allow the Contractor to procure the Mandatory Services from an alternative supplier (in which case an update to the Mandatory Service Provider Table is to be made by the Crown in accordance with clause 6.9) Dealing with the media: The Contractor must comply with the communications requirements set out in Schedule Situation pending delegation of certain powers: The powers of the Chief Executive under section 62(2) of the Corrections Act and regulation 99(1) of the Corrections Regulations are not, as at the Commencement Date, able to be delegated to any member of the Contractor's Personnel. Pending any change in law permitting such delegation (and any corresponding delegation of the relevant powers to a member of the Contractor's Personnel): the Crown will ensure that the Chief Executive, or a member of the Department holding a delegation from the Chief Executive, is available at reasonable times (in accordance with protocols agreed with the Contractor) to exercise those powers in respect of the Contract Prison; and the Contractor will provide (in accordance with protocols agreed with the Crown) such reasonable assistance as the Crown requires to enable those powers to be properly exercised in respect of the Contract Prison. Page 14

15 7. SPECIFIED ENTITIES AND OFFICIAL VISITORS 7.1 Notification of Specified Entities or Official Persons: If the Crown wishes to grant access rights to an entity or person in relation to any Access Item, it may give a notice substantially in the form set out in clause 1 of Schedule 13 (Access Notice) that: the entity is a "Specified Entity"; or the person is an "Official Person". Subject to the Access Notice complying with the requirements of clause 7.2, on delivery of that Access Notice to the Contractor (or on any later date specified in the Access Notice), the relevant entity or person will become a Specified Entity or Official Person (as applicable). 7.2 Contents of Access Notice: An Access Notice must contain the following details: (c) (d) the identity of the Specified Entity or Official Person (as applicable); in the case of a Specified Entity, whether it is a Core Specified Entity; in the case of a Non-Core Specified Entity, which functions of the Non- Core Specified Entity are Supported Functions; the extent to which access by the Specified Entity or Official Person is to be granted to: (i) (ii) the Contract Prison (including through the Contract Prison, to the Old Mt Eden Facility); the Prisoners; (iii) the Records, the Contractor's technology environment, including computers and computer-based systems, Software, hardware and programmes, practices and procedures held or used by the Contractor or any Subcontractor in relation to: (A) (B) (C) the Contract Prison; any Prisoner or former Prisoner; any of the Contractor's Personnel or former Personnel; and (D) any contracts, arrangements or understandings entered into by the Contractor or any Subcontractor affecting the Contract Prison or any aspect of the Services, (each being an Access Item). 7.3 Deemed Access Notices: The Crown will be deemed to have given Access Notices on the Commencement Date as specified in clauses 2 and 3 of Schedule 13. Page 15

16 7.4 Access of Specified Entities and Official Persons: The Contractor must, subject to clause 7.7, provide each Specified Entity and Official Person with: such access to the Access Items as is specified in the relevant Access Notice; and in accordance with clause 14, such access to the Site as is specified in the relevant Access Notice, except that, in the case of a Specified Entity, such access must be given only to the extent that the Specified Entity reasonably requires that access for it to be able to carry out its Supported Functions. 7.5 Notice of change of status: The Crown may, from time to time, give notice to the Contractor that an Access Notice in relation to a Specified Entity or Official Person is amended or withdrawn, in which case the relevant Access Notice will be deemed to be amended or withdrawn accordingly. 7.6 Assistance: The Contractor must, promptly and efficiently, provide, and ensure that all of the Contractor's Personnel similarly provide, such assistance as is reasonably required by an Official Person or Specified Entity (taking into account, in the case of a Specified Entity, its Supported Functions) including: (c) (d) providing access to the Resources at the Contract Prison; providing appropriate office and other facilities at the Contract Prison (including basic facilities available to the Contractor s Personnel, such as telephones, bathroom facilities, staffroom access and tea and coffee); making appropriate Personnel available to answer queries in relation to any aspect of the Services or any Access Item; and in the case of the Primary Monitor, and any other Monitor, making suitable office accommodation available in the Contract Prison. 7.7 Access subject to Law: The Contractor is not required to provide access to any Access Item to any Official Person or Specified Entity to the extent that providing that access would breach any Law, including sections 110A, 118 and 199F(3) of the Corrections Act. 7.8 No limitation of Law: This clause 7 creates access rights in addition to those created by Law, and none of this clause 7, clause 14, or any other provision in this agreement purports to limit any access rights granted to any person by Law. 7.9 Disputes about access: If any dispute arises between an Official Person or Specified Entity and the Contractor about the access that the Official Person or Specified Entity is permitted under this clause 7 or clause 14, the issue may be raised with the Crown, and the Crown's ruling on the extent to which access is permitted will be binding on the Official Person or Specified Entity and the Contractor. 8. PERFORMANCE MANAGEMENT 8.1 General performance standards: The Contractor must perform the Services: with due care, skill and diligence; Page 16

17 (c) (d) in a manner that promotes the goodwill and reputation of the Crown; in accordance with Best Industry Practice; and in accordance with any other standards or performance requirements set out in this agreement. 8.2 Compliance with Budget Standards: Notwithstanding any other provision of this agreement, the Contractor must meet or exceed the performance standards for all output performance measures set for the Department as part of the Vote Objectives in any period to the extent they can be applied to an individual prison. If there is any uncertainty as to how the objectives, outcomes, measures or standards in the Vote Objectives relate to any aspect of the Services, the Crown will, acting reasonably, determine the appropriate interpretation. 8.3 Required Levels: The Contractor must ensure that it meets every Required Level in relation to every Performance Reporting Period. 8.4 KPI assessments: The Contractor must: (c) on the achievement of each Transition Payment Milestone, assess its performance against the Specific Deduction Events and against any Transition Deductions; at the end of each Month in relation to which Monthly ACRP Operation Fees, or Monthly Transitional Prison Operation Fees, are payable under Schedule 4, assess its performance against the Specific Deduction Events; and at the end of each Quarter-end Month that falls wholly or partly after the Contract Prison BAU Date, assess its performance against the KPIs and the Specific Deduction Events, and use that assessment to calculate the relevant Transition Fee or Monthly Fee as applicable. 8.5 KPI relief: If the Contractor can demonstrate to the Crown's reasonable satisfaction that: (c) (d) the Contractor s performance against a KPI has been adversely affected by any KPI Impediment; or a Specific Deduction Event has directly occurred because of a KPI Impediment; and the Contractor has taken all reasonable steps to mitigate the effect of the KPI Impediment on its performance of the Services; and as a consequence of the matters described in clause 8.5 or clause 8.5, and notwithstanding the steps described under clause 8.5(c), any Monthly Fee which the Contractor will receive will be lower than it would have been, but for the occurrence or existence of the KPI Impediment (the difference between the amounts being a KPI Reduction), the relevant Monthly Fee (or Transition Fee, where the Specific Deduction Event occurs during the Transition Phase) will be increased by an amount which is equal Page 17

18 to the amount of the KPI Reduction. The Monthly Fee (or Transition Fee) will not be adjusted to the extent that the Contractor's reduced performance could have been avoided or mitigated by taking reasonable steps to mitigate the effects of the KPI Impediment relied upon. Any claim by the Contractor for a KPI Reduction should be made as soon as possible by the Contractor and must be notified (together with all supporting information) to the Crown no later than the date on which the Contractor provides its report under clause 2 of Schedule Payment of Monthly Fee pending determination of KPI relief: Pending the Crown being satisfied as to the Contractor's entitlement to a KPI Reduction under clause 8.5, the Monthly Fee will be paid without adjustment. If a KPI Reduction entitlement is established, the amount of the KPI Reduction will be added to the next Monthly Fee invoiced after that entitlement is established. 8.7 Dispute of KPI assessments: The Crown may, after receiving an invoice for a Monthly Fee or Transition Fee, give notice disputing any specific aspect of the KPI, Specific Deduction or Transition Deduction assessment implicit in the calculations attached to the invoice in accordance with clause 11.3(c) (KPI Dispute Notice). Where the Crown gives any KPI Dispute Notice: the KPI Dispute Notice will be deemed to be a notification of a dispute for the purposes of clause 24.2; and until the dispute is resolved, the Crown may, in its sole discretion, act (including for the purpose of calculating payments) as if it was correct in relation to the matters raised in its KPI Dispute Notice. 8.8 Timing of KPI Dispute Notices: The Crown may give a KPI Dispute Notice at any time within 10 Working Days of the later of: the date on which the Crown receives the relevant valid invoice (including the required calculations); and the date on which the Crown becomes aware of the circumstances which mean that the Contractor's assessment of its performance against the KPIs or Specific Deduction Events or Transition Deductions was not correct. 8.9 Changes of Performance-Related Fee Mechanism: Subject to clause 8.10, the Crown may, at any time, review any aspect of the way the Performance-Related Fee is determined or calculated, including (without limitation): (c) (d) the KPIs; the "Performance Standards", "Targets" and "Weightings" set out in the tables in clauses 2.2 and 2.3 of Schedule 3; the Specific Deduction Events; and the amounts of the Specific Deductions, and following such a review, may change any aspect of the way the Performance- Related Fee is determined or calculated by giving three months' notice of the relevant change to the Contractor. If any such change is made, Schedule 3 and/or Schedule 4 will be deemed to have changed accordingly. Page 18

19 8.10 Restrictions on changes to Performance-Related Fee mechanism: The Crown may not make changes to any aspect of the way the Performance-Related Fee is determined or calculated unless the Contractor has agreed to the changes in writing or: (c) (d) the changes are reasonable; the Crown has explained to the Contractor in writing why the changes are reasonable; the Crown has consulted with the Contractor about the changes and the reasons it proposes for making them; and the Crown has not made any changes to any aspect of the Performance- Related Fee in the preceding twelve month period Reasonable changes: For the purposes of clause 8.10, changes to an aspect of the way the Performance-Related Fee is determined or calculated are deemed to be reasonable if (without limitation) they are equivalent to changes made to the standards and targets that are applied by the Law, the Government, the Minister or the Chief Executive to the Department or public prisons in New Zealand Performance-Related Fee changes not a Change: A change to Schedule 3 or Schedule 4 which is deemed to have been made under clause 8.9 is not a Change, and, accordingly, clause 31 does not apply in relation to changes to the way the Performance-Related Fee is determined or calculated which are made under clause WARRANTIES 9.1 Crown Warranties: The Crown warrants to the Contractor that, as at the Commencement Date: the Crown has obtained all Authorisations other than Crown Consents and done all things necessary to enter into, and to perform its obligations under, this agreement; and the Crown is not aware of any fact or circumstance which would, or might reasonably be expected to, prevent the Crown from performing its obligations under this agreement, at the times and in the manner contemplated by this agreement. 9.2 Warranties: The Contractor warrants to the Crown that: it has obtained all Authorisations and has done all things necessary in order to enter into this agreement and to perform the Services; it is not aware of anything which will, or might be reasonably expected to, prevent it from performing, or impair its performance of, the Services, in the manner and at the times contemplated by this agreement, and which it has not disclosed to the Crown in writing; Page 19

20 (c) (d) (e) (f) it has the expertise, experience, Resources, capacity and ability to, and will, perform the Services in a timely manner, efficiently, diligently, with due care and skill and in accordance with Best Industry Practice; the statements and representations that it and/or its Subcontractors made in, and in relation to, the Proposals are true and correct; all information provided by the Contractor to the Crown under or in relation to this agreement is, or will be when disclosed, complete and accurate in all material respects and that the use of that information by either party (for the purpose for which it was disclosed) will not breach the Intellectual Property rights of any third party; and neither the Contractor nor any of its Related Companies is involved in or threatened with any legal proceedings or other dispute resolution procedure which could have a material adverse effect on the Contractor's ability to perform the Services and which the Contractor has not disclosed to the Crown. 9.3 Warranties given on a continuous basis: Each of the warranties set out in clause 9.2 is deemed to be repeated at all times during the Contract Term by reference to the facts existing at that time, except that: the warranty in clause 9.2(d) is given only as at the Commencement Date; and the warranty in clause 9.2(e) is given only as at the time that the relevant information is provided. 9.4 Reliance on warranties: Each party has relied upon the representations contained in the warranties by the other party given in this clause 9. PART II PAYMENTS 10. FEES PAYABLE FOR THE SERVICES 10.1 Fees for the services: The Crown agrees to pay the Contractor: (c) (d) (e) the Milestone Fee in relation to each Transition Payment Milestone upon achievement of that Transition Payment Milestone; the Monthly ACRP Operation Fee in relation to each Month, or part Month, from the day following the ACRP Handover Date until the Contractor Prison Operation Date; the Monthly Transitional Prison Operation Fee in relation to each Month, or part Month, from the day following the Contractor Prison Operation Date until the Contract Prison BAU Date; the Monthly Fee in relation to each Month, or part Month, from the day following the Contract Prison BAU Date until the end of the Contract Term; the Innovation Fee in relation to each Month, or part Month, from 1 July 2012 until the Termination Date; and Page 20

21 (f) subject to clause 30.21, the Disengagement Fees in accordance with the Disengagement Plan Fees are full amount to be paid: The Fees comprise the total amount payable by the Crown to the Contractor for the Services. Accordingly, except as expressly provided otherwise in this agreement, the Contractor is responsible for all costs, expenses, taxes and other amounts incurred by the Contractor in relation to the Services. 11. INVOICING AND OTHER OBLIGATIONS RELATING TO PAYMENTS 11.1 Invoice required: The Fees payable in relation to any Month or Transition Payment Milestone during the Contract Term, and not previously invoiced by the Contractor, must be invoiced by the Contractor as follows: for the Fixed Fees, within 3 Working Days after the end of the relevant Month or after the day on which the relevant Milestone Fee becomes payable under clause 10.1 of Schedule 7 (as applicable); and for the Performance-Related Fee, within 10 Working Days after the end of the relevant Month When payment will be made: Except where this agreement expressly provides otherwise, any invoice received by the Crown which complies with clause 11.3, will be paid by the Crown as follows: as to the amount invoiced in accordance with clause 11.1, by the later of: (i) (ii) the 20th day of the Month in which the invoice is received by the Crown; and 10 Working Days after the invoice is received by the Crown; and as to the amount invoiced in accordance with clause 11.1, by the 20th day of the Month following the Month in which the invoice is received by the Crown General invoicing requirements: Each invoice submitted to the Crown, in order to be valid for the purposes of this agreement, must: (c) (d) be in the form of a valid tax invoice for GST purposes; be delivered, mailed or faxed (with the original copy of any faxed invoice to be delivered or mailed at the earliest reasonable opportunity) to the Crown's Address, and addressed for the attention of the Crown's Contract Manager; be accurate and correct and include such details supporting the total Fees as are set out in clause 2 of Schedule 14 or which the Crown gives notice that it requires; be ed to the Crown in accordance with the requirements set out in clause 1 of Schedule 14 (or in accordance with any alternative requirements which the Crown gives notice of); and Page 21

22 (e) be in the format specified by notice given by the Crown to the Contractor from time to time, and the Contractor must ensure that each invoice submitted to the Crown is valid Disputed invoices: If the Crown disputes any portion of any amount appearing as payable on any invoice issued by the Contractor: (c) (d) (e) the Crown must give notice to the Contractor of such dispute at the earliest reasonable opportunity; the Crown is not required to pay a disputed invoice until the parties' dispute has been resolved by agreement between the parties or, in the absence of such agreement, in accordance with clause 24; if an invoice is disputed, the Contractor may issue a credit note in relation to the disputed invoice and a new invoice (which must comply with clause 11.3) for the undisputed amount, and the Crown must pay that new invoice in accordance with this agreement; the Contractor must continue to perform the Services and all of its other obligations under this agreement notwithstanding the dispute; and the Crown acknowledges that neither the issue of a new invoice, nor the issuance of a credit note, under clause 11.4(c) is, of itself, an admission by the Contractor that the first invoice was incorrect, and does not affect any entitlement the Contractor may have to the disputed amount Withholding tax requirements: If the Crown is required by Law to make any withholding on account of tax from any payment to the Contractor, the Contractor authorises the withholding and payment of that withholding tax to the Inland Revenue Department. The Crown will supply to the Contractor copies of all relevant documentation to evidence the payment of such withholding tax to the Inland Revenue Department. Payment of such withholding tax to the Inland Revenue Department shall be deemed to be payment by the Crown to the Contractor of an amount equal to the withholding tax. The Contractor will not have any right to reimbursement by the Crown, for payment of such withholding tax to the Inland Revenue Department Payment deductions and set-off: The Crown may set off any refund or other amount owing to the Crown by the Contractor against any amount payable by the Crown under this agreement, but must, if it does so, issue a statement to the Contractor showing details of the deduction or set-off Additional billing information requirements: The Contractor must provide such information, as and when the Crown reasonably requests, relating to any amount invoiced or proposed to be invoiced by the Contractor under this agreement Requirement to repay overpaid amounts: If the Crown overpays the Contractor, the Contractor must refund the overpayment within 14 Working Days of becoming aware of, or of being notified of, the mistake Interest payable on late payments: If any amount falls overdue for payment to either party (Interest Payee) under this agreement, then, unless the payment is being withheld in accordance with this agreement on the basis of a bona fide Page 22