Guidebook for organizational tools

Transcription

1 Guidebook for organizational tools December 2016 Co-funded by European Union

2 Erik van Agtmaal and Johan Coolen Factor4 Lange Winkelstraat Antwerpen Belgium T: +32(0) E: Reviewer Stefan Amann e7 Energie Markt Analyse GmbH Walcherstraße 11/43 A-1020 Vienna This document has been elaborated in the Energy Performance Contracting Plus project and is available in the project website. Task: 2.2 Deliverable: 2.3 This project has received funding from the European Union s Horizon 2020 research and innovation programme under grant agreement No The content here included reflects only the authors views and the EASME is not responsible for any use that may be made of the information it contains.

3 Content 1. Introduction Phases in the creation of a SPIN... 5 Preparatory phase... 6 Phase one... 6 Phase two... 7 Phase three... 8 Phase four... 9 Phase five... 9 Phase six Phase seven Phase eight Other organisational tools Do s and Don ts The European Code of Conduct a deontological approach Document storage and synchronisation cloud solutions Annex SPIN Collaboration Model Contracts Complex SPIN Memorandum of Understanding model Simple SPIN Model Contract Complicated SPIN Model Contract The European Code of Conduct for Energy Performance Contracting Energy Performance Contracting Plus 3

4 1. Introduction The EPC+ project aims at developing and promoting new business models for the implementation of energy efficiency services through cooperation between Small and Medium-sized Enterprises (SMEs). Through cooperation innovative energy efficiency services (EES) can be offered. Cooperation enables SMEs to offer novel and high quality energy services which they could not provide as stand-alone companies. Such services are serious alternatives to standard energy efficiency services provided by large energy service companies (ESCOs) and may provide promising opportunities in terms of innovation and services. The cooperation of SMEs with the aim to offer joint EES to the market is described as a SPIN. A SPIN (SME Partnerships for Innovative Energy Services) is an organized cluster of independent companies, mainly SME's, that jointly supply energy efficiency services and that have a structured long-term collaboration with commonly agreed objectives. While the benefits of SPINs are clear the creation of a SPIN is a difficult process. SMEs will not engage in collaboration unless there is a strong feeling of Need, Trust, and Control. Sustained commitment from parties involved can only be achieved when all the parties see a clear need to collaborate. Trust is needed to limit self-interest actions. The SME s ability to largely control its own destiny is a prerequisite for SME decision makers to engage in a collaborative network. This guideline is developed to support the creation of a SPIN. It describes the sequence of different phases in the creation of a SPIN and the organisational tools that can be used in each phase. The guideline builds on previous tasks and deliverables in work package 2 and 4 and more in particular on report 2.02 Organisational tools for SME Partnerships for Innovative Energy Services. Energy Performance Contracting Plus 4

5 2. Phases in the creation of a SPIN Earlier in the EPC+ project we learned that SPINs can have different organizational structures and relationships between the different actors. To understand these differences and its consequences for management decisions we introduced a categorization of SPINs in Simple, Complicated and Complex SPINs and clarified the various roles of SPIN members per SPIN type. 1 A Complex SPIN is the most appropriate organisation in a pre-market situation to foster the benefits of collaboration between SMEs and to support the creation of Simple or/and Complicated SPINs. Simple and Complicated SPINs are created to provide innovative energy services when there is a potential willingness of parties to collaborate and a market for EPC services or an expectation that the market will take-up these services in the short to medium term (6 months to maximum 2 years). Each type of SPIN will have its own sequence of decisions and tasks as showed in the table below. These decisions and tasks are defined from the perspective of the party that takes the initiative to create a SPIN. SPIN type Phase Complex Simple Complicated 0 Decision on the need to collaborate 1 Decision on the most appropriate SPIN type based on the market situation (pre-market, market expected in the short term or existing market) and own strategic choices. 2 Define objectives of the SPIN Define role and interest of the coordinator Initial business plan 3 Identification of members Identification of associates Identification of partners 4 Initial contact with other parties and invitation to meet 5 Clarification of intentions and Bilateral meetings objectives Memorandum of Understanding 6 Common meetings SPIN Contract Common meetings 7 Decision on the continuation Common meeting Business plan of the SPIN or transition to another SPIN type 8 See phases 1 to 8 for other SPINs Business plan SPIN Contract 1 For more information on the categorisation of SPINS read Organisational tools for SME Partnerships for Innovative Energy Services. Energy Performance Contracting Plus 5

6 Preparatory phase Before a decision is made about the creation of a SPIN the initiating organisation or company should evaluate the need for collaboration. A company should collaborate only if it will enhance its competitive positioning in the market place. If the evaluation shows that collaboration within a SPIN is the best strategic option the company should define its own role in the future SPIN and its potential relationship with the other parties. Phase one SPIN type Phase Complex Simple Complicated 1 Decision on the most appropriate SPIN type based on the market situation (pre-market, market expected in the short term or existing market) and own strategic choices. The first phase in the creation of a SPIN is common for all SPIN types. It includes an initial analysis of the market situation, the own competitive situation, the opportunities for a potential SPIN and the most appropriate SPIN type. The two major organisation tools in this phase are the Business Model Canvas and the Guidelines on SPIN categorisation. Organisational tool 1 - The Business Model Canvas The Business Model Canvas is a strategic management and lean start-up template for developing new or documenting existing business models. It is a visual chart with elements describing a firm's or SPIN s key partners, activities, resources, customers, cost structure and revenue streams. The Business Model Canvas can be printed out on a large surface so groups of people can jointly start sketching and discussing business model elements with post-it note notes or board markers. It is a hands-on tool that fosters understanding, discussion, creativity, and analysis. The business model canvas is described in the book Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers by Alexander Osterwalder and Yves Peigner (co-author), A preview of the book is available on: An explanation how to create a business model canvas can be found on: Organisational tool 2 - Categorisation of SPIN types An important insight is that SPINs can be categorized in three significantly different types. A good understanding of the different organisational SPIN types, the related management decision rules and how to choose the most appropriate SPIN type is a major factor in the ultimate success of a SPIN. Energy Performance Contracting Plus 6

7 The Business Model Canvas can be used to compare the different SPIN types and to take a decision on the most appropriate type. When a specific SPIN type is selected this can be integrated in a next version of the business model canvas as the SPIN type will have an impact on all aspects taken into account in the Business Model Canvas. An additional insight is that a SPIN can be situated near the border area between different types or can move from one type to another. A SPIN that is situated near the border area will have characteristics of two or more types which will make the interrelationships between the SPIN actors more difficult to define. The categorisation of SPIN types is explained in D2.02 Organisational tools for SME Partnerships for Innovative Energy Services, available on: Phase two SPIN type Phase Complex Simple Complicated 2 Define objectives of the SPIN Define role and interest of the coordinator Initial business plan Complex SPIN The goal of a Complex SPIN is to become a Simple or a Complicated SPIN or to generate one or more of these SPINs. The coordinator should define the exact objectives of the Complex SPIN as well as its own role in the Complex SPIN and whether it has the intention to participate in a potential future Simple or Complicated SPIN. When a coordinator is already a service provider or has the intention to become one, it should define how a potential conflict of interests with potential members can be avoided and how its role and interest will be communicated to potential members. In both cases the credibility as coordinator and the acceptance of its role by future members of the SPIN is an important success factor. Trust will be easier to achieve when the role of the coordinator is limited to supporting other companies to create a Simple or Complicated SPIN. Simple and Complicated SPINS In a Simple and Complicated SPIN the second phase includes the development of an initial business plan by the Principal (Simple SPIN) or by the Leading Partner (Complicated SPIN). This initial business model could be used to present ideas to potential SPIN partners or associates later in the process. The initial business model will also help to identify potential information gaps and will support thinking and the exchange of ideas as part of the planned process. The EPC+ team recommends searching for business plan templates in country specific languages in the internet. Also various academic literature is available for the preparation of a business plan. Energy Performance Contracting Plus 7

8 Phase three SPIN type Phase Complex Simple Complicated 3 Identification of members Identification of associates Identification of partners The third phase is about the identification and selection of potential parties. This phase is common for all SPIN types but totally different in terms of the most appropriate parties. Potential parties can be found on membership lists of national and international associations and chambers of commerce, via own networks, etc. Complex SPIN If a coordinator of a Complex SPIN will act as an independent facilitator it should select parties with a variety of expertise, services, resources and ambition. The objective should be to bring together a pool of companies where new initial relationships ( circles ) can be created between these companies as a result of a dynamic interactive process generated and supported by the coordinator. When a coordinator has the intention to become part of a future Simple or Complicated SPIN it should already take this intention into account in the selection of initial members to safeguard its own position. Simple SPIN The selection of potential associates in a Simple SPIN is based on the need of the associate in terms of additional expertise and services and the likelihood that selected potential associates will be willing to work in a Principal Associate relationship. Complicated SPIN The selection of potential partners in a Complicated SPIN should be done with great care. Once created a complicated SPIN will act as a whole and partners will be largely interdependent. Energy Performance Contracting Plus 8

9 Phase four Phase SPIN type Complex Simple Complicated 4 Initial contact to other parties and invitation to meet In the fourth phase the potential members, associates or partners should be contacted and invited for participation in a common meeting in a Complex SPIN or for initially bilateral meetings in a Simple and Complicated SPIN. No specific tools are required for this phase, as approaching potential members will be conducted via , phone or personally. Phase five SPIN type Phase Complex Simple Complicated 5 Clarification of intentions and objectives Memorandum of Understanding Bilateral meetings Complex SPIN The fifth phase for a Complex SPIN is a clarification of the objectives of the SPIN and of the intention and role of the Coordinator. A Complex Spin is a pre-market SPIN with the objective to generate one or more Simple or Complicated Spins. It can be seen as a loose network in order to accelerate ideas and initial cooperation. A Complex Spin does not need to have a formal contract to provide this promotion and supporting tasks. To keep the participation threshold to a minimum for SME owners/managers formal procedures including contracts are not recommended.to create trust and willingness to participate in a Complex SPIN the potential members should know in detail what they can expect from participating and what is expected from them. This clarification can be under the form of a information letter, presentation or/and a memorandum of understanding. While non legally binding documents are appropriate for SPINS with an independent coordinator, legally binding documents are better for SPINs where the coordinator has a commercial objective. Energy Performance Contracting Plus 9

10 Organisational tool 5 Complex SPIN template contract template A template of a Complex SPIN Memorandum of Understanding can be found in various languages on the EPC + website and in English in the Annex and on Simple and Complicated SPINS The fifth phase in a Simple and Complicated SPIN are bilateral meetings with potential associates or partners to discuss potential collaboration (the establishment of a SPIN), the roles of each party, business model and innovative service to be offered. Workshop material (template with guiding questions) and supporting presentations can be found online at Phase six SPIN type Phase Complex Simple Complicated 6 Common meetings SPIN Contract Common meetings Complex SPIN The sixth phase in a Complex SPIN are common meetings with all members. Based on a preliminary analysis of the characteristics of the members, observation during these meetings and/or by asking members, one or more self-organising circles of members can be identified. Once identified a decision can be made whether or not to continue with one or more of these circles. Simple SPIN The sixth phase for a Simple SPIN is a Principal-Associate agreement. This agreement is needed to safeguard the position of the Principal and should be agreed before the Associates will meet each other in or outside common meetings organised by the Principal. Organisational tool 4 - Simple SPIN master contract template The Simple SPIN master contract template is based on the assumption that the Principal has a strong bargaining position. It is mainly a master subcontracting contract. In reality a SIMPLE SPIN can be situated in the border area between the Simple and Complicated domains and have some elements of a partnership. Principals of a Simple SPIN are recommended to read the master contract template of a Complicated SPIN and to integrate parts of it in their master contract if needed. Energy Performance Contracting Plus 10

11 A template of a Simple SPIN master contract can be found on the EPC + website: Complicated SPIN The sixth phase for a Complicated SPIN are common meetings with all partners to discuss and agree the objectives and structure of the SPIN, the contribution, responsibilities and tasks of each partner. The business model canvas and initial business plan developed in phase 2 can be used to support this process. Phase seven SPIN type Phase Complex Simple Complicated 7 Decision on the continuation of the SPIN or a transition to another SPIN type Common meeting Business plan Complex SPIN Phase 7 is the final phase in the life cycle of a Complex SPIN. In this phase a decision will have to be made about the continuation of the Complex SPIN or to start the process to become or to generate one or more Simple SPINs or Complicated SPINs. The Coordinator can decide to continue its role as a consultant to support companies to create a Simple or Complicated SPIN if it had not the intention to become a party in one of these SPINs. Simple SPIN After the Principal has a contract with its different associates the Principal can organise a common meeting to discuss the market and business opportunities. The outcome of this meeting can be used to feed the business plan of the Principal. Complicated SPIN Following the common meetings in the previous phase a business plan should be developed with a strong involvement of each partner. The final business plan will have to be accepted by each partner and will be the basis for contract negotiations in phase eight. Phase eight SPIN type Energy Performance Contracting Plus 11

12 Complex Simple Complicated Phase 8 See phase 1 to 8 for other SPINs Business plan SPIN Contract Simple SPIN After the Principal has a contract with its different associates the Principal can organise a common meeting to discuss the market and common business opportunities. The outcome of this meeting can be used to feed the business plan of the Principal. Complicated SPIN The partners in a Complicated SPIN have to agree on the partnership resulting in a contract between all partners. Organisational tool 5 - Complicated SPIN master contract template The Complicated SPIN master contract template is based on the assumption that the SPIN is a real partnership between equal partners. In reality a Complicated SPIN can be situated near the border area between Complicated and Simple and have elements of a Principal Associate contract. With regard to liabilities and liability limitations vis-à-vis the client it is important to define the most appropriate policy taking into account general and specific client requirements, legislation, risks, costs and commercial aspects. Liabilities between the partners in SPIN should be aligned with the accepted liabilities vis-à-vis the client. As all or most partners in a SPIN will have some kind of liability insurance and property damage insurance it is recommended to investigate the coherence of these different insurance policies and to look for opportunities for harmonisation and cost savings. The main types of insurance are liability insurance and property damage insurance. Liability insurance is a wide term a wide term that encompasses several forms of insurance (e.g. products liability, general liability, professional indemnity, employers' liability etc.). The liability and insurance systems across Europe are not yet harmonised. Systems can be imposed by legislation, based on contracts or even customs. To know more about the insurance and liability requirements in EU member states we refer to the Comparative study about consulting engineers liability and insurance requirements across Europe, European Federation of Engineering Consultancy Associations, A template of a Complicated SPIN master contract can be found in various languages on the EPC + website and in English in the Annex in English and on Energy Performance Contracting Plus 12

13 3. Other organisational tools Beside the mentioned tools, especially Do s and Don ts as well as an deontological code (the European Code of Conduct). Do s and Don ts A clear value proposition is needed. For SME s to engage in a SPIN the starting point is to show the benefits of working together. Develop a clear value proposition and supporting material to convince SMEs to join. Think before you act. The creation of a successful SPIN is not an easy thing. The approach proposed in this report is based on hard lessons learned over the last years. The choice of the right SPIN type at the right moment is a key success factor. Walk before you can run. While principal - subcontractor relationships are relative easy to set-up and to manage, complicated SPINs are not. If you go for a partnership start with the relative easy things such as a common brochure, exchanging information on potential clients, etc. Be aware that a SPIN can switch between different domains (e.g. Complicated SPIN for common marketing and Simple SPINs for the execution of business assignments). First try and then trust. While trust between large enterprises is achieved and/or secured by formal legal agreements, SME s are mostly not willing to spend a lot of time on formalities such as contracts. Trust between actors in a SPIN should therefore be achieved in a more informal way build up step by step. Trust is hard to gain but easy to lose. As trust is one of the cornerstones of a SPIN, short time self-interest behaviour should be avoided. Involve co-workers. The employees in a SPIN belong to different companies. Involve co-workers and use instruments such as common meetings to strengthen a common group feeling and the willingness to collaborate with colleagues in the SPIN. Agree on service levels. Define and agree on the scope, responsibilities and service quality of each SME in a SPIN. Agreed service levels should be SMART: Specific - clear and concise to avoid any misinterpretation of what is to be achieved; Measureable - Can be quantified and results can be compared to other data and able to show trends if measured over time. These measures should also give a consistent result, regardless of who is doing the calculation; Achievable - Practical, reasonable and credible given available resources in SMEs; Relevant - Informative and useful to other actors in a SPIN, having regard to the context in which the entity operates (i.e. need to measure what is important to the success of the SPIN); Timed - Specifies a timeframe for achievement and measurement. Energy Performance Contracting Plus 13

14 Create incentives to share information and business opportunities. Agree and define clear rules about the allocation of sales commissions and develop other incentives for SMEs in a SPIN and their employees to share information and business opportunities. Keep the long term perspective in mind. It takes time for a SPIN to become successful. Use initial successful assignments to strengthen the perception of advantages in the longer term. Hope for the best and prepare for the worst. Things can go wrong. For SMEs in a SPIN it is important to have an exit option at acceptable costs and without fundamentally damaging their business interests (e.g. reputation). Promote your SPIN. A SPIN can be considered by potential clients as a worse alternative for a large company that is offering a combination of expertise and services or it can be seen as a much better solution. Develop the right storytelling and marketing approach to convince potential clients to work with your SPIN. Develop a well working SPIN sales process. When marketing efforts lead to potential clients asking for more information or a quotation this should be provided at high quality and in time. All SMEs in the SPIN should have a good knowledge of the services offered by the SPIN and should agree to provide the correct information in time to the SME that is in charge of the contacts with the client. The SME (e.g. principal or partner) that is responsible for preparing the quotation should have a good knowledge of the information requirements of each partner to provide correct cost and other relevant information. The European Code of Conduct a deontological approach The Transparense 2 project started in April 2013 and was completed in September The project brought together 20 European partners and was financed by Intelligent Energy Europe Programme of the European Union with co-funding from the project partners. Within the frame of this project a deontological approach for Energy Performance Contracting (EPC) was launched. The so called European Code of Conduct for Energy Performance Contracting defines the basic values and principles that are considered fundamental for the successful preparation and implementation of EPC projects. The Code of Conduct is an important tool in the relationship between the actors in a SPIN and between the SPIN and its clients. Its values can be summarised as follows: Efficiency Energy savings Economic efficiency Sustainability in time 2 Energy Performance Contracting Plus 14

15 Professionalism Expertise High quality service Health and safety concerns Good name in the sector and project Reliability Responsibility Respect Responsiveness Objectivity Transparency Integrity Openness Long term approach Transparency of all steps and financing arrangements Clear, regular and honest communication The European Code of Conduct for Energy Performance Contracting and details can be found in various European languages on or in the Annex section. Document storage and synchronisation cloud solutions Document storage and synchronisation solutions help people work together on a single document or file. It is software that allows teams to work on a single document, such as a business plan at the same time from different computer terminals or mobile devices. Examples of document storage and synchronisation cloud solutions are Google Drive, dropbox and MS Sharepoint. Individual solutions can be implemented by IT companies. Energy Performance Contracting Plus 15

16 Annex SPIN Collaboration Model Contracts 3 Complex SPIN Memorandum of Understanding model This memorandum of understanding (the "MoU"), is made and entered into by and between [Company name], represented by [Name], [Position], with its registered office at [ ], with enterprise number [..] (hereinafter referred to as the "Coordinator"), and [Company name], represented by [Name], [Position], with its registered office at [ ], with enterprise number [..] (hereinafter referred to as a "Member"). and [Company name], represented by [Name], [Position], with its registered office at [ ], with enterprise number [..] (hereinafter referred to as a "Member"). Hereinafter, the Coordinator and the Members shall be collectively referred to as the Parties, and Party shall mean any one of the Coordinator or a Member as applicable in the context in which the term is being interpreted. WHEREAS: A. A SPIN (SME Partnerships for Innovative Energy Services) is a nationally organized cluster of independent energy efficiency service providers, mainly SMEs, that jointly supply energy efficiency services and that have a structured long-term collaboration with commonly agreed objectives. B. The coordinator promotes and supports the creation of one of more SPIN(s). C. Members are all energy efficiency services providers interested to investigate the opportunity to develop, create and to participate in a SPIN. OBJECTIVES The objective is to investigate the benefits and feasibility of a SPIN and to support the creation of this SPIN that will provide services that consist of: Manageable project sizes that can be directly awarded or awarded with simple tendering procedures or pre-awarded services (according to procurement law) with one or more energy efficiency measures (e.g. LED lighting, pumps and electric motors, ventilation systems, cooling, consulting services and user motivation with no or low cost investments etc.); Highly standardized and simple contracts: simplified models and contracts with e.g. unique determination of savings and quality guarantees beyond conventional warranty etc.; and Projects with open financing possibilities for clients such as (pre-negotiated) bank conditions, alternative ways of funding, flexible financing solutions etc. 3 Note: Model contracts in further European languages can be found at Energy Performance Contracting Plus 16

17 DESCRIPTION OF PROCESS The Coordinator will organise one or more working sessions with the objective to foster interactions and collaboration between members, inform members about guidelines and other supporting tools developed in the framework of the EPC plus project and support members willing to create and/or join a SPIN. COLLABORATION The partners will participate in the process to the best of their ability. The contractual relationship between members in a future SPIN can be a Principal - Associate(s) relationship (a Simple SPIN) or a joint venture type partnership with one or more leading partner(s) (a Complicated SPIN). Members could become a Principal, Associate, Leading Partner or Partner in a SPIN. TIME FRAME The process will start on dd/mm/yyyy and is expected to terminate by dd/mm/yyyy. CONTRACTUAL RELATIONSHIP The Parties acknowledge that no contractual relationships is created between them by this MoU. WITHDRAWAL A member may withdraw from participation in the process upon a 3 days written notice to the Coordinator and the Coordinator will inform the remaining members about the withdrawal. The Coordinator can force a member to leave the process in case of misconduct or if the participation of the member in the process is clearly not in the interest of the objectives of this MoU. This MoU will enter into force at the moment that the Coordinator and a minimum of three members have signed the MoU. Date: dd/mm/yyyy Place: Signed by On behalf of Date: dd/mm/yyyy Place: Signed by On behalf of Energy Performance Contracting Plus 17

18 Date: dd/mm/yyyy Place: Signed by On behalf of Date: dd/mm/yyyy Place: Signed by On behalf of Energy Performance Contracting Plus 18

19 Simple SPIN Model Contract This agreement (the "Agreement") dated as of [day month year], is made and entered into by and between [Company name], represented by [Name], [Position], with its registered office at [ ], with enterprise number [..] (hereinafter referred to as the "Principal"), and [Company name], represented by [Name], [Position], with its registered office at [ ], with enterprise number [..] (hereinafter referred to as the "Associate"). Hereinafter, the Principal and the Associate shall be collectively referred to as the Parties, and Party shall mean any one of the Associate or the Principal as applicable in the context in which the term is being interpreted. WHEREAS: A. The Principal is a firm that provides innovative energy efficiency services and that has invested in the development of a network of associated sub-contractors and other business partners to provide these services. B. The Associate is a firm that provides [..]. C. The Principal wishes to engage the Associate as a preferred sub-contractor, and the Associate agrees to undertake services in the field of energy efficiency services on behalf of the Principal. NOW THEREFORE, THE PARTIE HAVE AGREED AS FOLLOWS: Article 1. Client Client Contract Sub-contract Preferred Associates Business partners DEFINITIONS AND INTERPRETATION means any client of the Principal disclosed to the Associate in a Sub-contract. means a contract between the Principal and the Client relating to the provision of energy efficiency services. means a contract between the Principal and the Associate relating to the supply of Goods and/or Services by the Associate on behalf of the Principal. means the sub-contractors of the Principal as listed in Annex A and updates of this list when additional sub-contractors join the network of Preferred Associates. means strategic business partners of the Principal as listed in Annex B and updates of this list when additional partners become strategic business partners of the Principal. Energy Performance Contracting Plus 19

20 Article 2. REQUEST FOR SERVICES 2.1 When the Principal wants to request services from the Associate the Principal shall send a request for services to the Associate. 2.2 Within [three] working days of the request for services being sent, the Associate shall express to the Principal in writing, by , its availability to carry out the services required. 2.3 Within [five] working days of a request for services being sent by the Principal, the Associate shall send a tender to the Principal for the services requested. Article 3. CLIENT CONTRACT LEADING TO A SUB-CONTRACT 3.1 If a Client Contract is entered into, the Principal and the Associate shall enter into a Sub- Contract subject to the Principal and the Associate agreeing commercial terms. 3.2 Signature of this Agreement imposes no obligation on the Parties to Principal to purchase goods of services from the Associate. Only implementation of this Agreement through a Sub- Contract is binding on the Principal and the Associate. Article 4. PERFORMANCE OF SERVICES 4.1 The Associate shall perform the Services in accordance with the terms of the Sub-Contract, the European Code of Conduct for Energy Performance Contracting and with good professional practice. 4.2 The Associate shall have sole responsibility for taking the necessary steps to obtain any permit, certification or licence required for performance of the Agreement under the laws and regulations in force. 4.3 The Associate must ensure that any staff performing the Services has the professional qualifications and experience required for the execution of the tasks assigned to him or her. Article 5. NON- OR UNDERPERFORMANCE 5.1 In the event of services prepared, undertaken or supplied by the Associate not meeting the reasonable requirement of the Principal, the Associate agrees to take all reasonable means to ensure that the Services are rectified to the Principal's satisfaction. 5.2 Should the Associate fail to perform his obligations under the Agreement, the Principal may - without prejudice to its right to terminate the Agreement reduce or recover payments in proportion to the scale of the failure. Energy Performance Contracting Plus 20

21 Article 6. RESTRICTIONS 6.1 Following a request for services and in order to protect the business relationship and interests which the Principal has with its Client, the Associate agrees not to provide services directly or through another enterprise to the Client. This limitation applies for a period of [24] months from the last date of provision of services to the Client by the Associate through the Principal. 6.2 The Associate shall not directly or indirectly engage in any business with the Business partners of the Principal for the duration of this agreement and for a period of [24] months from the termination of this Agreement. 6.3 The Associate shall not directly or indirectly engage in any business that competes with the business of the Principal for the duration of this agreement and for a period of [12] months from the termination of this Agreement. This non-competition clause will apply to [description of services, description of network and/or geographic area]. 6.4 The Associate shall not enter into a direct or indirect business relationship with any of the other Preferred Associates unless via the Associate for the duration of this Agreement and for a period of [24] months from the termination of this Agreement. 6.5 The Principle will send updates of the list of Preferred Associates and of the list of Business Partner to the Associate when additional Preferred Associates and/or Business will join its network. 6.6 When the Associate had already a business relationship with one or more Preferred Associates and/or Business partners prior to this agreement and for additional Preferred Associates and/or Business partners prior to the date mentioned on the update referred to in clause 6.5, it can continue this direct or indirect relationship. In the event of existing business relationships the Associate will give evidence of this to the Principal. Article 7. COPYRIGHT AND CONFIDENTIALITY 7.1 The Associate agrees that all confidential information disclosed to the Associate by the Principal will be received and held in confidence by the Associate both during the term of this Agreement and after the termination thereof. 7.2 The Associate shall be bound by the Copyright and Confidentiality terms of the Client Contract, the terms of which shall be deemed to have been incorporated into the Sub-contract. 7.3 The Associate is allowed to disclose its relationship with the Principal, inclusive a general description of the assignment but without mentioning the name of the Client. Article 8. PAYMENT RATES AND PAYMENT TERMS 8.1 The payment rates and payment terms may vary depending on the nature and duration of the work and will be agreed prior to the commencement of the services for a Client. 8.2 The payment rates and payment terms shall be detailed in each Sub-contract. Energy Performance Contracting Plus 21

22 Article 9. INSURANCE AND LIABILITY 9.1 The Associate shall take out insurance against risks and damage relating to the performance of this Agreement as required by the relevant applicable legislation and as reasonably required by standard practice in the industry. 9.2 A copy of all the relevant insurance contracts shall be send by the Associate to the Principal if so requested by the Principal. 9.3 The Principal shall not be liable for damage sustained by the Associate in the performance of this Agreement except in the event of wilful misconduct or gross negligence on the part of the Principal. Article 10. DURATION 10.1 This Agreement shall enter into force on the date of with it is signed by both Parties as is concluded for a period of [three] years This Agreement shall be renewed automatically up to [two] times under the same conditions, unless written notification to the contrary is sent by one of the Parties to the other Party at the latest one month before the expiry date. Article 11. CHOICE OF LAW AND JUDICIAL COMPETENCE This Agreement shall be governed and construed in accordance with the laws of [country]. The Parties hero accept the exclusive jurisdiction of the courts of [town]. This Agreement has been signed on [dd Month yyyy] in two original copies, each Party having received a copy. For and on behalf of the Principal For and on behalf of the Associate Name: [ ] Name: [ ] Title: [ ] duly authorised as he so declares Title: [ ] duly authorised as he so declares ANNEXES - Annex A: Initial list of Preferred Associates - Annex B: Initial list of Business Partners Energy Performance Contracting Plus 22

23 Complicated SPIN Model Contract This agreement (the "Agreement") dated as of [day month year], is made and entered into by and between [Company name], represented by [Name], [Position], with its registered office at [.. ], with enterprise number [..] (hereinafter referred to as the "Lead Partner / Partner A"), and [Company name], represented by [Name], [Position], with its registered office at [ ], with enterprise number [..] (hereinafter referred to as the "Partner B"). and [Company name], represented by [Name], [Position], with its registered office at [ ], with enterprise number [..] (hereinafter referred to as the "Partner C"). Hereinafter collectively referred to as the Parties and separately as Party. WHEREAS: A. Partner A is a firm that provides [description]. B. Partner B is a firm that provides [description]. C. Partner C is a firm that provides [description]. D. The Parties are independent energy efficiency service providers that wish to collaborate in the field of energy performance contracting and related services with the objective to strengthen their competitive situation in the market. NOW THEREFORE, THE PARTIES HAVE AGREED AS FOLLOWS: Article 1. Agreement Associates Client Client Contract "Effective Date" DEFINITIONS AND INTERPRETATION this agreement, as varied in writing from time to time in accordance with its terms; means sub-contractors of a Partner; means any client of the Principal(s) disclosed to the other Partners in a Sub-contract; means a contract between a Principal / a Partner] and the Client relating to the provision of energy efficiency services; The date this agreement is made and entered into by and between the Partners; Energy Performance Contracting Plus 23

24 Energy Efficiency Services [description of the specific energy services that will be developed and conducted by the SPIN]; Initial Business Plan the initial business plan as set out in annex A; Initial Joint Development Cost Budget the initial joint development cost budget as set out in annex B; Joint Steering Committee the joint steering committee as specified in Clause 3; Principal(s) SME Partnerships for Innovative Energy Services or SPIN Subcontract Subcontractor the party/parties that commercialise the Energy Efficiency Services; the collaborative network organisation of the Parties that will be created by this Agreement; a contract between a Party that will act as Principal and a Party that will act as subcontractor; the party that will be a subcontractor of a Principal. Article 2. OBJECTIVES OF THE COLLABORATION The Parties will collaborate with the objectives to develop common Energy Efficiency Services, to perform these services according to the European Code of Conduct for Energy Performance Contracting and to commercialise these service in [country]. Article 3. JOINT STEERING COMMITTEE 3.1 Within [20] working days after the Effective Date, the Parties shall establish a Joint Steering Committee for the overall coordination and management of the SPIN and activities under this agreement. The Joint Steering Committee shall conduct its discussions in good faith with a view to operating to the mutual benefit of the Parties and in furtherance of the successful development and commercialisation of the Energy Efficiency Services. 3.2 The role of the Joint Steering Committee shall be: (a) to oversee the collaborative activities of the Parties under this Agreement; (b) to discuss and establish the overall strategy for the development of Energy Efficiency Services; (c) to discuss and establish the overall strategy for the branding and commercialization of the SPIN and the Energy Efficiency Services; (d) to review and approve updates or amendments to the Initial Business Plan and any subsequent versions of this Business Plan; Energy Performance Contracting Plus 24

25 (e) to allocate responsibilities and tasks to the respective Parties; (f) to review and approve updates or amendments to the Initial Joint Costs Budget and any subsequent versions of this budget; (g) to define the most appropriate liability policy vis-à-vis clients; (h) to perform such other functions as appropriate to further the purposes of this Agreement, as mutually determined by the Parties. 3.3 Each Party will have an equal vote in the Joint Steering Committee and decisions will be taken unanimously. 3.4 Each Party shall appoint a representative in the Joint Steering Committee with sufficient seniority within the applicable Party to make decisions arising within the scope of the Partnership. 3.5 The Joint Steering Committee shall meet as frequently as required, but in no event less than [six (6) times a year]. The meetings of the Joint Steering Meeting may be held in person or by audio or video conference. 3.6 The [Lead Partner] shall be responsible for preparing and issuing minutes of each such meeting within [fifteen (15) days] thereafter. Such minutes shall not be finalized until each Party reviews and confirms the accuracy of such minutes in writing; provided that any minutes shall be deemed approved unless a Partner objects to the accuracy of such minutes within [thirty (30)] days after the dissemination of the minutes by the Lead Partner. 3.7 If the Joint Steering Committee fails to reach an agreement on a matter deemed to be important by one or more Parties, the Joint Steering Committee shall submit the respective positions of the Parties with respect to such matter for discussion in good faith by the Parties' respective Executive Officers. 3.8 Any dispute arising out of the interpretation or implementation of this agreement which cannot be settled by mutual agreement shall be referred for decision to an arbitrator chosen by agreement between the Parties or, failing such agreement on the choice of the arbitrator within three months of the request for arbitration to an arbitrator appointed by [the Court] Article 4. RESPONSIBILITIES, TASKS AND DUTIES OF EACH PARTNER 4.1 Each Party shall: Inform its clients and prospects on the services of the SPIN; Energy Performance Contracting Plus 25

26 4.2 The Parties agree to allocate specific responsibilities and tasks to each other. The Lead Partner shall fulfil the following specific tasks: Provide the overall coordination and management of the SPIN; Organise the Joint Steering Committee, preparing and issuing of meeting minutes; Setting-up a common document storage and sharing application; Create a common logo; Develop and manage a common website; Develop marketing tools including a brochure; Marketing of the Energy Efficiency Services; Prospecting and sales; Manage requests for services; Partner B shall fulfil the following specific tasks: ; Partner C shall fulfil the following specific tasks: ; Article 5. Associates Each Partner is allowed to engage Associates provided that the use of such Associates shall not relieve the Partner of any of its obligations under this Agreement. Article 6. JOINT DEVELOPMENT COSTS 6.1 The joint development costs will be equally shared between the Partners. The allocation of joint development tasks to Partners and related estimated maximum agreed Initial Joint Development Cost Budget are set forth in annex B. An amendment of the maximum agreed Joint Development Cost Budget and/or the allocation of tasks and budget to Partners needs to be approved by all Partners. 6.2 Within [five (5) working days] following the end of each month beginning from the Effective Date, each Partner will prepare and deliver to the Lead Partner a report detailing its Joint Development Costs incurred during such period. Energy Performance Contracting Plus 26

27 6.3 The Lead Partner will prepare a monthly composite report that summarizes the Joint development costs incurred by each Party for such month and computes the amount that each Party has to receive or pay from or to other Parties as the case may be. 6.4 The Parties will settle their mutual payments [per trimester]. Article 7. COMMERCIALISATION 7.1 The Energy Efficiency Services will be commercialised by [name of parties] who/which will act as Principal(s). Only (the) Principal(s) can enter into a Client Contract. The other Parties will work as Subcontractors of the Principal(s). 7.2 The sales price of Energy Efficiency Services proposed to a Client will be defined by the Principal after consultation with the Subcontractors involved in the particular proposal. Article 8. FINDERS FEE 8.1 When a Principal can close a contract with a Client introduced to the Principal by another Party or through the other Party during the term of this Agreement, then the Principal shall pay the other Party a finder s fee equal to [5] % of the contract value, VAT excluded. 8.2 The finders fees are due when the Principal has invoiced and collected the related payment from the referred client and will be paid within 30 days of receipt of an invoice. Article 9. PROFIT SHARING 9.1 The objective of the Parties is to share the profit between each other, generated by the commercialisation of the common Energy Efficiency Services. The Parties will investigate the requirements and feasibility of an open book cost calculation methodology or alternative approach to provide transparency in each other costs and of a fair profit sharing methodology. 9.2 Prior to an agreement on profit sharing each Party will use competitive prices in quotations. Article 10. REQUEST FOR SERVICES 10.1 When a Principal has to make an offer for Energy Efficiency Services it shall send a request for services to the respective Subcontractors Within [three] working days of the request for services being sent, the Subcontractor shall express to the Principal in writing, by , its availability to carry out the services required Within [five] working days of a request for services being sent by the Principal, the Subcontractor shall send a quotation to the Principal for the services requested including detailed information on the different cost elements. Energy Performance Contracting Plus 27

28 Article 11. CLIENT CONTRACT LEADING TO A SUB-CONTRACT 11.1 If a Client Contract is entered into, the Principal and the Subcontractors shall enter into a Sub-Contract subject to the Principal and the Subcontractors agreeing commercial terms in line with what has been agreed in the Client Contract. Article 12. PERFORMANCE OF SERVICES 12.1 The Subcontractor shall perform the Services in accordance with the terms of the Sub- Contract and with good professional practice The Subcontractor shall have sole responsibility for taking the necessary steps to obtain any permit, certification or licence required for performance of the Agreement under the laws and regulations in force The Subcontractor must ensure that any staff performing the Services has the professional qualifications and experience required for the execution of the tasks assigned to him or her. Article 13. PAYMENT RATES AND PAYMENT TERMS UNDER A SUBCONTRACT 13.1 The payment rates and payment terms may vary depending on the nature and duration of the work and will be agreed prior to the commencement of the services for a Client The payment rates and payment terms shall be detailed in each Sub-contract. Article 14. NON- OR UNDERPERFORMANCE 14.1 In the event of services prepared, undertaken or supplied by the Subcontractor not meeting the reasonable requirement of the Principal, the Subcontractor agrees to take all reasonable means to ensure that the Services are rectified to the Principal's satisfaction Should the Subcontractor fail to perform his obligations under the Subcontract, the Principal may - without prejudice to its right to terminate the Subcontract reduce or recover payments in proportion to the scale of the failure. Article 15. CONFIDENTIALITY 15.1 Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the Parties, each Party agrees that it shall keep confidential and shall not publish or otherwise disclose any of the other Party's confidential Information Each Party shall be bound by the confidentiality terms of the Client Contract, the terms of which shall be deemed to have been incorporated into the Sub-contract. Energy Performance Contracting Plus 28

29 Article 16. INTELLECTUAL PROPERTY RIGHTS 16.1 Neither Partner shall use any trade or service marks, trade names, emblems or logos belonging to one of the other Partners except in accordance with the provisions of this Agreement or any directions given by such other Party Neither Partner shall, by virtue of this agreement, acquire (including the right to acquire) any Intellectual Property Right owned by another Party The Parties shall jointly own any intellectual property rights that are a result of the work performed under this agreement. Article 17. INSURANCE AND LIABILITY 17.1 The liabilities vis-à- vis the Client that can be accepted as well as limitation of liabilities will be defined and agreed between the Partners in the Joint Steering Committee The Principal agrees to carry and maintain insurance policies in line with the liabilities accepted between the Parties and required by the relevant applicable legislation and as reasonably required by standard practice in the industry Each Party shall be liable to the other Parties and shall indemnify and hold harmless such other partners for and against any liabilities, damages and costs resulting from the noncompliance of its duties and obligations as set forth in this agreement and its annexes Each Partner shall take out insurance against risks and damage relating to the performance of this Agreement and as required by the relevant applicable legislation A copy of all the relevant insurance contracts shall be send by each Partner to the Lead Partner who will store and share these documents with the other Partners on a common web based information storage and sharing platform The Lead Partner will investigate, within 3 months after this Agreement shall enter into force, the differences between the insurance contracts of Partners and the opportunities for harmonisation and cost reductions. Article 18. DURATION 18.1 This Agreement shall enter into force on the date of with it is signed by both Parties as is concluded for a period of [three (3)] years This Agreement shall be renewed automatically up to [two (2)] times under the same conditions, unless written notification to the contrary is sent by one of the Parties to the other Party at the latest one month before the expiry date. Energy Performance Contracting Plus 29

30 Article 19. EARLY TERMINATION 19.1 Each Partner shall have the right to terminate this Agreement upon written notice to all other Partners if another Party materially breaches an obligation under this Agreement, and, after receiving written notice from the non-breaching Party identifying such material breach in reasonable detail, fails to cure such material breach (including failure to pay any amounts due hereunder) within [twenty (20)] working days from the date of such notice In the event that a Partner is acquired by, or merged with, another third party the other Partners shall have a period of [sixty (60)] days to determine whether to continue or to terminate this Agreement upon written notice to the other Partners. Article 20. ASSIGNMENTS Neither Partner may assign or transfer this Agreement or any rights or obligations hereunder to a third party without the prior written consent of the other Partners, except that a Party may make such an assignment without the other Parties consent to an Associate of the assigning Party. Article 21. CHOICE OF LAW AND JUDICIAL COMPETENCE This Agreement shall be governed and construed in accordance with the laws of [country]. The Parties hero accept the exclusive jurisdiction of the courts of [town ]. This Agreement has been signed on [dd Month yyyy] in two original copies, each Party having received a copy. For and on behalf of Partner A For and on behalf of Partner B Name: [ ] Name: [ ] Title: [ ] duly authorised as he so declares Title: [ ] duly authorised as he so declares For and on behalf of Partner C For and on behalf of Partner D Name: [ ] Name: [ ] Title: [ ] duly authorised as he so declares Title: [ ] duly authorised as he so declares Energy Performance Contracting Plus 30

31 ANNEXES - Annex A : Initial Business Plan - Annex B : Initial Joint Development Cost Budget Energy Performance Contracting Plus 31

32 The European Code of Conduct for Energy Performance Contracting (see next page) Energy Performance Contracting Plus 32

33 European Code of Conduct for Energy Performance Contracting Version as of 11 July 2014

34 European Code of Conduct for Energy Performance Contracting Transparense project This document has been prepared within the framework of the "Transparense Increasing Transparency of Energy Service Markets" project co funded by the Intelligent Energy Europe Programme of the European Union. Date 11 July 2014 Authors Damir Staničić Jozef Stefan Institute, Energy Efficiency Centre Slovenia Jana Szomolányiová Michaela Valentová Vladimír Sochor Jaroslav Maroušek SEVEn, The Energy Efficiency Center Czech Republic Endorsement The European Association of Energy Service Companies (eu.esco) and European Federation of Intelligent Energy Efficiency Services (EFIEES) endorse the European Code of Conduct for EPC and support its use when implementing EPC projects. Acknowledgements We thank the members of the Transparense project team and Steering Committee and especially the European ESCO associations eu.esco and EFIEES as well as EASME project officer Timothée Noël for valuable comments that improved the text of the Code of Conduct. Disclaimer The sole responsibility for the content of this document lies with the authors. It does not necessarily reflect the opinion of the European Union. Neither the EASME nor the European Commission are responsible for any use that may be made of the information contained therein.