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Leasing & Loan Finance

Clarifications

There are 38 clarifications for this DPS

1. Good afternoon: We see that there is no "use of information" waiver / disclaimer within the Lease documentation: If we access this framework, under GDPR, as we are processing customer data, including details of those signing the agreement, our compliance department have taken advice and their view is that a clause of this type ought to be included: Can the documents be amended to include such a clause? We can provide draft wording if required.
Within the Bid Pack, please refer to 'DPS Joint Schedule 11 - Processing Data' for clauses relating to 'use of information'.
Answered
29/09/2022 16:03
2. Good afternoon: I see that Core Terms / Clause 23.2, The Relevant Authority can assign, novate or transfer its Contract or any part of it to any Crown Body, public or private sector body which performs the functions of the Relevant Authority. However, there is a Default clause within the Lease contract "If Lessee ceases to be a Public Body". Can i ask which of these will prevail please? Look forward to hearing from you
The contract between the Buyer and Supplier does not automatically terminate if the Supplier has triggered clause 23.2 novating, assigning or transferring the agreement to a private sector organisation.
Answered
09/06/2022 15:34
3. Good morning - re" "Other Contracting Authorities" (any actual or potential Buyer under the DPS Framework) must be told about the DPS Framework by the Supplier before the Supplier accepts a non DPS order from them" - all business in this sector emanates via intermediaries (i.e. mandated lease advisors) - in effect we are one step removed - How is the CCS suggested that this is requirement is adhered to?
Whilst it can be expected that the majority of opportunities coming through to the DPS will be via ""intermediaries"", there are instances where DPS suppliers are directly engaged with public sector customers. In these cases, where the service provided (asset financing) is similar or identical to that of the Asset Finance DPS (RM6120), it is the duty of the supplier to inform the prospective customer of the DPS. It is then for the customer to decide on their preferred route. In terms of ensuring adherence, this is done so through the regular Supplier Relationship Management (SRM) activity conducted by the Category with suppliers. During these sessions, pipeline and spend will be covered along with questions to suppliers on what they are doing to actively promote the Framework/DPS. Category will ensure close relationships are maintained with customers to ensure line-of-sight for engagements but also to ensure a smooth process and solid reconciliation.
Answered
31/05/2022 16:13
4. Good afternoon: Looking through the documents issued, its appears you require a number of "reports" from Lessors who access the framework. Would you be so kind as summarise your requirements please (i.e what and when?), so I understand resource implications. Many thanks.
The reports required that are for the Management Information or MI process. This process needs to take place on a monthly basis regardless of whether or not the supplier is seeing spend come through the DPS. The report exists to provide an audit trail and ability to reconcile spend with Suppliers and Customers. In terms of the resource intensiveness of the process, whilst it does need to be conducted on a monthly basis the activity itself is very simple and straightforward. The activity involves completing a number of fields on a single tracker for information such as Asset Type, Value, Interest Rate etc. Where there is no spend reported for a particular month, the activity is quicker as the entries for the majority of fields will be a nil response.
Answered
31/05/2022 16:12
5. Good afternoon: The Framework Lease documentation is somewhat more onerous that industry standard: As I understand Lessors are required to complete this and send to the Lessee on award. As such I have 2 questions please: Do you have an example of (all) competed documentation that you would expect to be sent to a Lessee by a Lessor you could share? Are CCS involved in documentation origination and signing process?
The framework documentation has been designed to ensure transparency and protection for all involved parties, hence the level of detail required. 1) DPS Schedule 7 - Order Procedure, details the responsibility of involved parties together with the process flow for orders to be complete. DPS Schedule 6 - Order Form, provides the document required to be sent by the supplier for an order to be placed. 2) As specified in DPS Schedule 7 - Order Procedure v.0 5.1 The Supplier acknowledges that the Buyer is independently responsible for the conduct of its award of Order Contracts under this Contract and that CCS is not responsible or accountable for and shall have no liability whatsoever, except where it is the Buyer, in relation to: 5.1.1 the conduct of Buyer in relation to this Contract; or 5.1.2 the performance or non-performance of any Order Contracts between the Supplier and Buyer entered into pursuant to this Contract.
Answered
31/05/2022 16:10
6. Good morning: Looking through the documentation suite / requirements pack it mentions a supplier "Cyber Essentials Certificate" requirement. Despite having a myriad of certifications, protocols, and licences it would appear that sadly we may not have a "Cyber Essentials Certificate" in place, however we do have a Cybersecurity function as part of our wider group framework and have to abide by the rules and regulations of this with regards to systems security and protocols. We are also subject to regular cybersecurity audits to ensure adherence to this framework which includes penetration testing of our systems/key applications. Is this sufficient?
CCS has recently amended the requirement for Cyber Essentials. Either Cyber Essentials certification or an equivalence will now be accepted. For a full list of all acceptable equivalence certifications, please see DPS Schedule 9 - Cyber Essentials Scheme v2.0 which can be located within Attachment 7 on the Bid Pack.
Answered
06/05/2022 15:58
7. Re Clause 23.2 of the Core Terms "The Relevant Authority can assign, novate or transfer its Contract or any part of it to any Central Government Body, public or private sector body which performs the functions of the Relevant Authority." Has the CCS considered the effect to Lessors of the clause insofar as the Lessee has the ability to assign a contract to an entity which may be of far lesser credit standing and rating? In effect on day 2 of a contract, a Lessor could be forced to Novate a contract to a sub investment grade entity and incur an increased cost of risk capital provision)
"The premise for the clauses under Section 23 are for Government to reorganise public entities as it deems necessary. Whilst this situation is possible, it is highly unlikely that Government will act illicitly to defraud financiers in this way. This is a Core Term and therefore non-negotiable. In any event, the Supplier is protected through the Termination Sum and Event of Default. "
Answered
06/05/2022 15:57
8. With regard to Order Schedule 28 (Loan Terms) we note that whilst "Default Rate" is defined it is not used elsewhere within the document. Is this an oversight? (We note default interest may be charged under the HP, Finance Lease and Operating Lease terms so why not under the Loan terms?)
The Default Rate is defined as 1% per annum. This is detailed within Section 2 of the Call-off agreements (HP, Ops Lease etc.), not the Core Terms document.
Answered
06/05/2022 15:57
9. Clause 23.4 in the Core Terms provides that the Supplier can terminate a Contract which has been novated to a private sector body if an Insolvency Event occurs. However, the HP, Finance Lease, Operating Lease and Loan Terms do not oblige the Buyer to pay a Termination Sum in this situation. Is this an oversight? We would certainly expect a termination sum to become payable in such circumstances. Additionally, the Buyer can terminate a Contract if a Variation cannot be agreed (cl. 24.3(b) in the Core Terms), or if there is any actual or potential conflict of interest (cl. 32.3 in the Core Terms). But again, there appears to be no obligation on the Buyer to pay a termination sum in such circumstances.
"The premise for the clauses under Section 23 are for Government to reorganise public entities as it deems necessary. It is highly unlikely that Government will act illicitly to defraud financiers. Suppliers are protected by Section 18 (Event of Default) on the Call-off agreement (HP, Ops Lease etc.) through the obligation of the Buyer relating to the Termination Sum. In the unlikely event of Clause 23.4 taking effect, whereby the public sector customer novates the contract to a private sector body (through 23.2) where the new entity experiences an insolvency event, the Supplier can terminate the agreement. The Termination Sum is only payable in instances covered by Section 18 (Event of Default). "
Answered
06/05/2022 15:57
10. Good morning, If we use two companies to write our asset finance business (1 the main UK holding company to write loans and HP; and 2 a wholly owned subsidiary to write finance leases and operating leases) do both companies need to complete the SSQ?
Upon Review, Category has taken the view that should multiple supplier entities within the same parent be used to provide different services under the DPS, each supplier entity will have to separately register as a supply for the DPS on its own merit.
Answered
06/05/2022 15:57
11. Re the Lease documents, I cant see that the lessee has an obligation to ensure that they are responsible for removal of own data or images before returning equipment at termination - Lessors would normally expect to see inherent within a Lease contract - its in both parties interests - can I ask why this has been omitted please?
The obligation for the lessee to remove all of their data before returning equipment is included in DPS Order schedule 37. This schedule includes the return conditions for ICT and technology, to be used with an Operating Lease. This obligation can be added as a Special Term in the Equipment Order Form for other forms of lease, such as Hire Purchase or Finance Lease.
Answered
26/01/2022 10:07
12. Good afternoon Our Public Liability insurance provides cover against pretty much any claim for loss experienced by any third party as a direct result of our conducting our undertaking. Certain classes of risk are excluded from this cover, the most prevalent being road risk which is separately covered by road risk (motor) insurance. Professional Indemnity insurance covers risk associated with the provision of professional services (For example, the sale of advice and the work conducted by professional people/firms - Solicitors, Accountants, etc). The buyer in these circumstances is reliant on the expertise of the 'professional' concerned in the purchase of these services insofar as it would involve the buyer qualifying in the delivery of these services themselves in order to exercise informed judgement. Our operations for this contract do not involve any risk which would fall outside the scope of our Public Liability cover (road risk excepted). Therefore, please would you review the need for Professional Indemnity insurance for this contract and advise if it can be removed? If not, please would you advise what risk(s) specifically you are looking for cover against on this contract?
Professional Indemnity insurance is a standard requirement of the Public Sector Contract which is the contract used for all CCS agreements. The Professional Indemnity requirement for this DPS is set at a lower level of £1m compared to other CCS agreements, this is due to the nature of the services being provided through this DPS.
Answered
26/01/2022 10:06
13. Please can you confirm how many mini-competition tenders have been issued under this DPS to-date.
The Leasing and Loans Finance DPS is still in the mobilisation phase. It can be accessed by customers but as yet, a futher competition has not been complete.
Answered
26/01/2022 10:05
14. Would it be possible to have an answer to the clarification question we asked in November (clarification question number 22). Our question was whether there is any scope to discuss (a) the number of the indemnities that are uncapped, this is not something we can ordinarily agree to, (b) the requirement that the Supplier / Lessor bears the risk of any change to general law (this is usually a Lessee risk) and (c) the requirements of clause 14.3 and 14.8 of the Core Terms are very onerous and go beyond the usual requirements of agreements of this kind.
The concerns raised in this question were considered during the consultation period and changes were made only where it was considered necessary. There will be no further amendments made to the points raised.
Answered
17/01/2022 13:50
15. During the consultation process we raised concerns about certain clauses in the Core Terms and the Order Schedules, a number of these key concerns were rejected and were not amended or addressed in the final form documents presented. Our concerns include (but are not limited to): (A) a number of the indemnities are uncapped, this is not something we can ordinarily agree to, (B) the requirement that the Supplier / Lessor bears the risk of any change to general law (this is usually a Lessee risk) and (C) the requirements of clause 14.3 and 14.8 of the Core Terms are very onerous and go beyond the usual requirements of agreements of this kind. Please clarify to what extent further amendments may be considered to the documents. Thank you.
The concerns raised in this question were considered during the consultation period and changes were made only where it was considered necessary. There will be no further amendments made to the points raised.
Answered
17/01/2022 13:44
16. Good morning: Are you able to share with us how the any bids under the DPS will be presented to the lessee please? I.e, how are the DPS going to summarise the bids submitted and present these for evaluation.
When the buyer runs a further competition through the DPS they will decide the method they use for communication and exchange of information. This will determine how the bids are presented to the buyer/lessee. This process will not be run through the CCS DPS. This process will become clear when a supplier is invited to particiapte in a further competition, and may vary depending on the buyer. CCS provides detailed customer guidance, and recommends using the portal provided by CCS (Bravo/Jagger) however this is for the buyer to decide. Many public sector organisations have their own portals which they prefer to use.
Answered
17/01/2022 13:41
17. RE" Order Schedule 26 (Operating Lease Terms) - If completed - the aggregate of the Extension Rentals should not be more than the Residual Value": - This does not provide / allow for any Lessors interest and equipment obsolescence risk premium to be factored in - can I ask how you would expect a Lessor to recover any on going interest and risk premium please?
The extension rentals (if any) are to be specified in the relevant Equipment Order Form which allows the Buyer and Supplier to agree the extension rentals they wish. The Buyer Guidance (which is guidance and not a contract term) advises public sector entities not to agree to pay rentals in excess of the residual value - otherwise the Buyer is paying for the entire asset (even though it must return the asset at the end of the term and does not get title). The Supplier's recovery is the extension rental plus the actual value of the asset at the end of the lease. If that actual value is likely to be NIL, Supplier's (i.e. lessors) are not required to agree any extension rentals at all.
Answered
16/11/2021 12:58
18. RE Order Schedule 25 (Finance Lease Terms): This key document has been poorly drafted and ambiguous - we would suggest there needs to be clarity (and distance) between the roles of the equipment and goods supplier and the supply of financial services - for instance would suggest that "Lessor" or "Funder"" be used rather than "Supplier" for the avoidance of any doubt in this document and all related documents. We would suggest that a review of (non Supplier funded) lease documents in use currently in the Public Sector would be advantageous to the CSS - is this being considered?
Each of the Asset Finance specific schedules (Order Schedule 25 - 40) are based on the Joint Schedules and use the same terminology for consistency throughout the contract. While Supplier (i.e. Lessor) and Buyer (i.e. Lessee) may not be common terms used in a non-public sector lease, there is no ambiguity in the terms used. This will remain as drafted
Answered
16/11/2021 12:57
19. Can you confirm which schedules relate specifically to an asset finance facility?
DPS Order Schedule 24 to 28 relate to the specific types of asset finance available through the DPS. DPS Order Schedule 29 to 40 are the Return Conditions which are required for an Operating Lease. The rest of the schedules in the bid pack are not specific to asset finance, they are standard schedules that form the PSC (Public Sector Contract),CCS' DPS Standard Terms and Conditions which is , the agreement used for all CCS framework and DPS agreements.
Answered
16/11/2021 12:44
20. RE: Order Schedule 26 (Operating Lease Terms) - Extension Notice - 30 Days' Notice: Normally the Leasing industry would require 90 days notice on larger infrastructure items - this enables better Residual Value pricing and value and is a fair and equitable position currently in place within the industry - can I ask the rationale as to why has the CCS chosen a 30 day notice period please?
30 days is a suggested, standard notice period and it has been noted in the Buyer's Guidance within this schedule that a longer notice period may be required for certain assets. The Buyer will make their own assessment according to the asset they require and complete as necessary.
Answered
02/11/2021 10:19

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