2.
SLAs are used to cover the provision of services in circumstances where binding
contracts are inappropriate and/or would be unenforceable eg an agreement
between PPARC and another Research Council or between two of PPARC’s own
Establishments. In both of these examples a binding contract would be
inappropriate. In the case of the latter, a contract would be unenforceable
because PPARC is indivisible in law. However, it should be noted that an
agreement described as an SLA between PPARC and another organisation may in law
be regarded as legally binding notwithstanding the term used to describe it. For
further information regarding the elements which make up a legally binding
contract see FM 403.
3.
Although SLAs may have no effect in law, their value lies in establishing the
basis of the working relationship between the provider of the service and the
customer; and in setting out clear lines of delegation, communication,
responsibility and accountability. Both parties are expected to act in
accordance with the terms and conditions of an SLA as though it were a binding
contract.
4.
SLAs should not be used to cover agreements with commercial suppliers. In cases
of doubt about the choice between an SLA and an ordinary contract, advice should
be sought from the Head of Procurement.
5.
When drafting an SLA, the following topics should be considered for inclusion:
(a) a full description of the service(s) to be supplied;
(b)
the respective roles and responsibilities of the two parties;
(c)
the basis of charging eg reimbursement of actual costs, fixed price as per an
original quotation, a scale of charges. Provision should be made for charges
to be varied in appropriate circumstances;
(d)
the terms of payment including frequency of billing and how quickly invoices
are expected to be settled;
(e)
the accounting arrangements including methods of payment and any need for
advances;
(f)
access to any on-site facilities necessary in connection with provision of the
service;
(g)
the nature of the information to be included with invoices to enable customer
departments to carry out adequate checks;
(h)
the management information arrangements including frequency and content of
reports and, where appropriate, measurement of performance against
predetermined targets;
(i)
the arrangements for settling disputes;
(j)
responsibilities for meeting losses and payment for spoilt work;
(k)
customer/provider liaison arrangements;
(l)
the periods of notice to be given by the customer and the provider
respectively in varying demand or availability of services;
(m)
the duration of the agreement and provision for premature termination.
6.
Establishment Directors have full delegated authority to negotiate SLAs with
other PPARC Establishments and the same levels of delegated authority in respect
of SLAs with other bodies as those applicable to contracts. Establishment
Directors are free to sub-delegate authority to sign SLAs in accordance with the
procedures and limits applicable to contracts set out in FM
101.
7.
Any queries concerning the content or interpretation of this FM should be
referred to Tom Hinde, Head of Procurement, PPARC Finance Division, Swindon
Office, tel: 01793 442045, e-mail: tom.hinde@pparc.ac.uk
.
