Penalty Points and Monitoring
One of the main operational issues for the Agency is how to ensure that the DBFO Co complies with the terms of the DBFO contract, post-award. Under the terms of the DBFO contract the Agency appoints representatives to monitor the construction, operation and maintenance carried out by the DBFO Co to ensure that it complies with its contractual obligations.
The DBFO contracts contain a penalty point mechanism which attributes points, for failure to perform under the contract. The allocation of penalty points have specific threshold triggers and increase monitoring requirements. Once a specified number of penalty points has been exceeded, the Agency has the right to terminate the contract. The Agency also has a number of other remedies arising from non-performance, including the right to remedy any default and invoice DBFO Co for its costs.