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® ... 3>:I 5:29 pm, Friday, 4 December, 1998
B ... B:] 6 page(s) in this fax, including this one
From: To: Mike Coombs Pathway
John Cook. fxr GRO.
L_.GRO___ cc: Dave Miller
George McCorkell
Attached please find an amended version (version 1.1) of the acceptance
dispute resolution paper. The amendments (which are marked) reflect
suggestions made by ICL Pathway. Dave phoned them through to me and
in one or two places left the specific drafting to me.
It is being copied to all three parties at Dave’s request for any further
comment. You will note that it is without prejudice - especially as it has
not been agreed by any of the three parties yet!
Document4
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ACCEPTANCE DISPUTE RESOLUTION
1 MANAGEMENT SUMMARY
1. It is recognised that during the acceptance testing there is increased scope for
disputes between BA/POCL and Pathway over the significance of perceived
acceptance incidents. This paper argues that there is a need to establish a fast wack
escalation route for certain categories of dispute, culminating in an opinion from an
independent expert. .
1.2, The paper outlines a process that, if it ran full term would deliver that expert opinion
7 days after the incident was first raised. The process envisages:
@ the Horizon Acceptance Incident Manager identifying the dispute as one
requiring escalation;
(ii) The Acceptance Test Managers being the first point of escalation (thereby
bypassing the Incident Review Panel);
Gi) A senior management forum of a director of each of the three parties being the
second level of escalation;
(iv) An independent expert opinion being the final escalation point.
1.3. The process would not deliver a binding opinion, buta. recommendation which had to
he acted on,
Atis-folt-that by 2th 1;
et ‘PP? ad
Tthe opinion of the expert s! sheould carry sufficient weight to 0 influence the senior
management forum to come to an agreement.
I 14. There istay also be-a role for the expert throughoutat-the-end-ef the acceptance
period in resolving disputes about the severity Jeve] assigned to open (and otherwise
agreed) incidents. However the expert opinion for these disputes. would carry less
weight as the issue would be more closely related to the business of the authorities.
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2. INTRODUCTION
2.1. _. This paper considers the role that a focused dispute resolution process could play in
the acceptance processes on the Horizon programme.
3. BACKGROUND
3.1. The paper “Horizon Process for Handling Acceptance Incidents” sets out the
responsibilities and processes for handling acceptance incidents. In- summary the
process is:
(@) an acceptance incident form is raised (many people can raise them) and
countersigned by the ICL Pathway Test Manager;
(b) the form is passed to the Horizon Acceptance Incident Manager (HIAIM) for
review and logging;
(©) the form is copied to the ICL Acceptance Test Manager (same day as incident);
(@) ICL Pathway assign a severity and inform the HAIM;
(e) ICL Pathway develop a rectification and retest plan as appropriate.
3.2, There are two forums which consider incidents, monitor progress on their resolution
and attempt to resolve any related issues:
(a) the Incident Review Panel (RP) which meets weekly and reviews all open and
new incidents;
(b) the Acceptance Management Forum which meets two weekly and considers an
overview report and any escalation from the IRP.
3.3. The only provision for handling disputes is when ICL Pathway produces an outcome
that is disputed by the relevant Horizon Acceptance Test Manager. The paper
focusses on whether the rectification plan is agreed, rather than over more
fundamental principles.
3.4. The first level of dispute resolution.set out in the paper is the Incident Review Panel.
Disputes not resolved there would be escalated to the Acceptance Management
Forum. At both levels ICL Pathway are represented and there is the opportunity to
find an agreement and resolve the dispute. The paper is silent however on the
authority levels available in these meetings. The paper also recognises that the
forums may need to meet more often than the planned weekly/two weekly cycles
during busy periods. These structures. may work well in monitoring work progress
and co-ordinating retests etc., but given the numbers of people involved it may be
practically difficult to “fast track” urgent disputes.
4, AREAS FOR RAPID ESCALATION/DISPUTE RESOLUTION
4.1, There are three main areas for potential and significant disputes:
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(a) Raising an incident
The process described requires some form of agreement at the point the
incident is raised. The Horizon and the Pathway Acceptance Test Managers .
both sign the form. There is scope for them not agreeing that a perceived fault
is an jucident at all. In practice the contract provision is that Horizon raises an
incident and Pathway must respond. Hence.this may be deferred to point (b)
below.
(b) Assigning a severity
There is scope for a disagreement over the severity of an incident. If the
incident is accepted and the dispute is only about the severity, then this only
becomes significant at the end of the acceptance process if the incident has not
been resolved. It can be argued therefore that there is less urgency in this area
(although potentially more significance in the end). ~
(©) “Substantive faults”
The most likely area for significant and urgent dispute is that of substantive
faults - i.e. those faults which do not explicitly link to an acceptance condition,
but which Horizon consider (and need to show) link to an obligation under the
contract that has not been met. Pathway may have the view that an incident is
not a fault and therefore they do not need to work on it in order to achieve
acceptance. This is a dispute that needs urgent resolution.
5. PROPOSED RESOLUTION OPTIONS
5.1. Introduction
5.1.1. It is proposed that the HAIM should be able to fast track substantive-fault disputes
under any of a, b and ¢ in paragraph 4.} above, initially to the Horizon Acceptance
Manager, who should have responsibility for making a rapid decision that day if he
feels that the point may be conceded or there is a lack of supporting material for the
issue. If he feels there is a dispute, he should involve the other two Acceptance
Managers (BA and Pathway) in a specific discussion to resolve the dispute within 24
hours. If the Acceptance Managers cannot resolve it within 24 hours it should be
escalated for senior management action.
5.2. Senior management action
5.2.1. In recognising that a dispute that cannot be resolved by the Acceptance Managers
I will be of significance to the businesses (POCL, BA and ICL), it is proposed that
there should be a route to immediately escalate such disputes to senior managers in
each of the three parties - at a sufficiently senior level to have the authority to make a
decision and deliver it_(and this authority can only be delegated to a peer ora
superior level). It is therefore suggested that the senior managers should be the CAPS
Director for BA, The Horizon programme Director for POCL and Director of
I Programmes for Pathway.
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5.2.2. If between these senior managers no agreement can be made within 2 days, the issue
should be reférred to an independent expert for review and an opinion.
5.3. Expert opinion
5.3.1. Almost by definition the proposed expert review step is only relevant to disputes that
are urgent and revolve round an interpretation of a contract, controlled document, the
conduct of an agreed process or other agreed. specification (see substantive fault
paragraph 4.1(c) above). If the Acceptance Managers and the senior managers cannot
agree this between themselves, then it is unlikely that simply escalating the issne
further up the respective management chains will produce a result - other than further
delay.
5.3.2. It has therefore been proposed that an independent expert be set up in readiness to
provide an opinion on such disputes. The expert should be a joint appointment agreed
with all parties. While the opinion of such an expert would not be binding, the fact
that some-one acknowledged as an expert by all three parties had formed an opinion
on the interpretation of the facts set before him would be very persuasive: If the
parties failed to settle on his advice the only other recourse would be either the
binding expert determination provided for in the Related Agreements, or in the
. any. other resolution from. such recourse, 85. -jin binding. determination Or in the
courtseither-ease an opinion from thean agreed expert would point the way to the
- likely conclusion.
5.3.3. In terms of timescale for the expert opinion process it is proposed that one extra day
is allowed to prepare the material on the matter to be referred to him from the senior
managers’ group, and that he is required to deliver his opinion within 1 day of
receipt. It is also proposed that an issue cannot be taken back to the expert once he -
has delivered his opinion (otherwise a party not liking the outcome could amass
further argument and keep the issue running).
5.3.4. The overall timeline is shown schematically in annex A.
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