POL00401664
POL00401664
ICL Pathway Forest Road Feltham Middlesex TW13 7EJ yy,
Telephone I
Facsimile
hip vee BOE RECEIVED 29 JUN 2001 a Fujitsu company
Keith Baines. 27 June 2001
Head of Horizon Commercial
Post Office Counters Limited
2" Floor
Calthorpe House
15-20 Phoenix Place
London WC1X ODG
Dear Keith
CCN 417%a - Charges
Thank you for your letter of 31 May 2001. Having looked into the issue you have raised it
appears there must be a misunderstanding on POCL’s part as to the work covered by the
charges set out in the Codified Agreement. Before describing some of the background to the
issue, ICL Pathway’s contractual position is as follows:
Clause 810.10 of the current version of the Codified Agreement (version 2.0) states that the
parties agree that:
to the extent that amendments were required to the provisions of the Clauses and Schedules
of [the] Codified Agreement in order to reflect the matters agreed in the CCNs listed in
Schedule A17 those amendments have been made..... the said CCNs have, accordingly,
been superseded by [the] Codified Agreement to that extent but this shall be without
prejudice to the application of the said CCNs to matters other than the Clauses and
Schedules of [the] Codified Agreement (including their application to ......any charges or
credits specified in the said CCN which shall be-due or which shall become due to be paid or
allowed)...” [my underlining}
CCN 411a is listed in Schedule A17. The amendments described in that CCN to
Requirement and Solution 543 have been made. In accordance with Clause 810.10, CCN
411a has been superseded, but that is without prejudice to the charges specified in that CCN
re dt $21 tid
hall became dua to be
The total amount due in accordance with “Sheet 3” of CCN 4114 is £288,690.32. 50% of that
sum became due on signature of the CCN, 25% on completion of Direct Interface Testing and
the remaining 25% on commencement of Roll-Out of CSR +. In addition, there are support
charges of 15% of that total, payable on an annual basis commencing upon Roll-Out of
CSR+. Although not stated in your letter, I understand (from Yemisi Rotimi’s email to Graham
Wingrove of 26/3/01) that: POCL has paid the invoice raised in respect of the first of the
payment milestones, and does not dispute that payment; that POCL has paid the invoice
raised in respect of the second payment milestone, but is now requesting a refund of that
payment; and that POCL has refused to pay the invoice raised in respect of the final payment
milestone, but has indicated that the annual support charges will be paid. !n surnmary, I take
it that POCL’s position is that ICL Pathway is not entitled to 50% of its softw development
charges. The argument you have raised in support of this position leads me to suspect, as I
mentioned: above, that there has been a misunderstanding as to what is covered by the
charges specified in the Codified Agreement.
JOE, Pah
sed fier” 20 Puacbunry Square Lorslon RCM ISL
or
POL00401664
POL00401664
(CL
aFujitsu company
continuation p
CCN 411a was originally listed (ie. in version 1.0 of the Codified Agreement signed on 28
July 1999) in Part 1 of Schedule A17. The relevant wording of Clause 810.10 in version 1
stated that:
“\...[the] CCNs listed in Part 1 of Schedule A17 have been agreed, shall be deemed to have
been raised in relation to this Codified Agreement and shall be incorporated in this Codified
Agreement as soon as reasonably practicable following its execution..."
That is precisely what happened. The amendments described in CCN 411a were made to
the relevant provisions. and introduced in the next “baseline” of the Codified Agreement at
version 1.2 under CCN 609.- CCN 609 also amended the wording of Clause 810.10,
changing it from a requirement that CCNs listed in Part 1 of Schedule A17 be incorporated in
the Codified Agreement to an agreement that such incorporation had occurred. an the basis
described above.
CCN 411a was submitted on 10 June 1999, approved by POCL on 11 June 1999 and
approved by ICL Pathway on 29 June 1999. As such this CCN appears to be unique, having
been the only CCN, so far as I can tell, which was submitted and approved in the window
between the “Letter Agreement” signed in May 1999 and signature of the Codified Agreement
on 28 July 1999. Clearly, the charges described in CCN 411a were not included in the
pricing for CSR and CSR + described in the Letter Agreement (as the CCN post dates the
Letter Agreement). As the original wording of Clause 810.10 makes clear, the CCN 411a
charges were not included in the pricing set out in Schedule A12 of the Codified Agreement
as the intention was that the CCNs would be incorporated after signature of the Codified
Agreement. Furthermore, the charges described in CCN 411a could not have been
subsumed in Schedule A12 prior to signature of the Codified Agreement as the “rules” on
codification would not have allowed that.
ICL Pathway’s invoices in respect of CCN 411a have, therefore, been properly raised and the
outstanding invoice should be paid without further delay.
I would be happy to discuss this at the next Contract Administration Board.
Yours sincerely
GRO
COLIN LENTON-SMITH
Commercial & Finance Director