Design Development: It is in Projectco`s interest for the FM provider to be involved in the design process, as it wants to be sure that the FM provider has taken design into account in its pricing strategy. As a general rule, the FM provider will agree with Projectco and the contractor in the interface agreement so that it can provide the services if the building is constructed in accordance with the specifications. To have some recourse, when the provision of services becomes more expensive or more difficult, because the design of the building is not as planned due to differences for example.B. in the specifications of the building, the FM supplier should have some recourse against the contractor. Life cycle issues: The interface agreement requires the construction or installation of certain assets defined in the design and construction specifications, but it would not be common for the contractor to take the risk of having to replace these assets earlier than expected. This risk is usually borne by Projectco or the FM provider. It is in Projectco`s and the FM provider`s interest to retain the assets for as long as possible and have them replaced before they become a burden to maintain or affect the FM provider`s revenues. The alternative to an interface agreement is that these issues are addressed in each of the subcontracts. In this model, each subcontractor has a separate contractual relationship with Projectco, which allows Projectco, in the event of a claim, to recover what it can recover from the other subcontractor. The problems with this are as follows: in order to minimise the life-cycle cost, the O&M contractor will want to have a contribution to the design. In addition, the O&M contractor must have access to the project during the design and construction phase, especially when the completion of an essential stage is approaching. For example, in rail and local projects, the O&M contractor must train its staff and test the system to ensure that it meets the operating standards of the P3 agreement.
Similarly, the design creator must enter parts of the final project (or even temporarily close a part) to address punch lists and warranty elements. An interface agreement is a tripartite agreement between the FM contractor, the contractor and the SPV. Although many promoters initially opposed the use of interface agreements, today they are often seen by the contractor as a channel for the transfer of responsibility to the FM contractor and their provisions therefore require careful consideration. Although a number of interface issues often arise in virtually all PFI projects, their relative importance varies depending on the overall structure of the project. Some of the most important and common interface issues are described below. In our experience, many interface agreements provide that Project Co can pass on such deductions to the defaulting subcontractor if either Construction Co or FM Co violates their respective subcontracts, resulting in deductions under the project agreement. This subcontractor may then attempt to recover these deductions from the other subcontractor if it considers that they have been misalted at first instance. Despite these drawbacks, some promoters and FM providers do not prefer interface agreements as a general business approach….