POL00028549
POL00028549
18 NOV 1999
~2227
Keith Baines
Post Office Counters Limited
20-23 Greville Street,
London ECIN 8SS
18 November 1999 . ‘CL
Thank you for your letter of Sth November 1999. If I may summarise the main
point you make, it is that, under the Second Supplemental Agreement (SSA),
the question of responsibility for errors causing “Cash Account Discrepancies”
is irrelevant to the question of how much POCL is entitled to charge for
reporting such discrepancies to Pathway, and to the question of the thresholds
which give POCL the right to suspend Roll Out. Many issues arise in relation
to this point and I set out below my initial thoughts on the matter, which we can
consider in more detail when we meet next week. In summary, whilst I am as
keen as you are’ to avoid nugatory work, I believe that responsibility for errors
will ultimately need to be determined to settle this matter. However, I submit
that we should aim to ring-fence such considerations so that they do not cloud
the assessment of rollout restart or get in the way of essential progress in
dealing jointly with Reference Data issues.
Before reaching the point at which responsibility for errors should be
determined, it is first necessary to establish whether or not problems reported to
Pathway can be properly described as ‘Cash Account Discrepancies’. We may
have a different interpretation of what this means, and this will become clear
from the Acceptance Incident related documentation which by now should have
been shared with your Acceptance colleagues. In particular, we hold that the
Product 196 problem (which accounts for some 1186 incidents) does not
produce Cash Account Discrepancies because the transaction stream sent to TIP
was consistent with the Cash Accounts produced in the outlets. :
Setting aside the question of what does and what does not constitute a Cash IcL Pathwa
Account Discrepancy, the SSA is, as you say, in large part silent as to the Forest Road
source of those discrepancies. However, that does not mean that the source of Feltham
the discrepancies is irrelevant for the purposes of the overall contract between Middx TW13 7E]
us (including the SSA).
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Registered i Ergjand no 3011561
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POL00028549
POL00028549
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POCL has a number.6f. contractual obligations in relation to the provision of
Reference Data to Pathway, of which the following are a few examples.
CAR number 891 (in Schedule A16 of the Codified Agreement) states: "POCL
shall...input Reference Data at the central and/or post office levels, and such
other levels as may be defined, in accordance with operating procedures agreed
with Pathway". I am, of course, aware that the parties have been trying to agree
on revised detailed procedures, that CCN496a which attached the relevant draft
CCD has been rejected and that the updated draft of the same CCD was
recently ‘withdrawn by Pathway for reasons given in John Bennett’s letter to
Dave Smith of 4 November: 1999, However, there are. amin
procedures agreed between us for the provision. of Referefice Data, which are
currently relevant for the purposes of POCL performing CAR 891. This is”
evidenced by the -docum ntitled "Reference. ‘Data - POCL/ICL Pathway
amongst ‘other
tiie fil
Ps ae states‘
, paar by
Data. There‘is
same provision.
Any failure by POCL to meet these (and other, e.g. volumetric) obligations
should be taken into account when considering Pathway’s responsibility to trap
errors which may result. It may be that we need to engage further in discussions
as to our intentions at the time the various CCNs were signed in September, or
as to the effect of one CCN upon another, (as to which I reserve our position),
but whether one takes the view that one liability should be set off against the
other, or that the cause of the errors should exclude them from computation, the
result is the same: we argue that Pathway should not be liable for payments to
POCL for the consequence of errors generated in the first instance by POCL.
The same logic applies to remedies associated with help desk service levels
where calls are a direct result of such errors (and there may be a case for
recovery of costs).
POL00028549
POL00028549
With respect to the criteria for judgin; 3 AI 376 from the standpoint of whether _
or not rollout should restart on 24" January, we do not propose that the
Reference Data issue be excluded from consideration (quite the reverse).
However, we will put the case for looking at Al 376 in a manner which is
consistent with the way the issue was perceived during the Live Trial, and
whether or not the targets have been achieved on that basis. With the
moratorium which existed at that time on Reference Data releases, we will
argue that Reference Data generated errors represent a new and important issue,
but one which is outside that originally comprehended. The key question is:
have we jointly identified the root causes of the problems and have we jointly
addressed them sufficiently to de-risk the operational consequences of failure
on a larger estate? I believe the consensus is that real progress is now being
made in this regard, which is good news.
> each of the points further at our meeting « on 23 November.
nly. < of the view that any dispute between us as to payment
Integrity Checking Process. should not distract us from the
procedures, and to precisely define each party’s obligations in relation to the
provision and receipt of Reference Data for the future.
I hope that we can agree on this separation, and look forward to further
dialogue next week.
Yours sincerely