Detail
This document is the Template CAP Agreement (Baseline) ("Baseline CAPA") to support the delivery of Direct Procurement for Customers (DPC) projects.
The Baseline CAPA provides a standard contractual starting point for future DPC projects and reflects the principles and risk allocation approach set out in DPC Guidance 2.0. It supports greater consistency across projects, reduce transaction and procurement costs, build market familiarity, and help deliver value for money for customers.
Alongside the Baseline CAPA, we have published:
- the Agreed Form. This includes the forms of appointments, collateral warranties and other agreements referred to in the Baseline CAPA as being in the Agreed Form;
- a Baseline CAPA to DPC Guidance Cross-Reference. This document sets out how the Baseline CAPA drafting provides detailed contractual drafting to support the principles set out in DPC Guidance 2.0; and
- a Baseline CAPA Overview Slide Pack. This document summarises the key principles underpinning the Baseline CAPA including the standard approach to risk allocation for less complex DPC projects. It also highlights some alternative drafting options which may be appropriate where supported by value for money justification. Water companies should consider these areas carefully when applying the Baseline CAPA to individual DPC projects.
As noted in the DPC Guidance, the use of the Template CAP Agreements is mandatory, and we expect water companies to use it as a starting point for the development of their project specific CAP Agreement. With the publication of the Baseline CAPA, we expect it to be adopted as such for future, less complex, DPC projects. We require justification for departures from baseline drafting and risk allocation approach but acknowledge project-specific adaptations may be required in some circumstances.
As projects progress through procurement and delivery, we will continue to monitor how the drafting operates in practice and engage with stakeholders through the R&C Steering Group and other forums. We will consider whether further refinements are necessary. We are also working to finalise the Template CAP Agreement (Target Cost) which will be published separately later in 2026.