Example Calculation (Using Problem Severity Level Clause Samples
The 'Example Calculation (Using Problem Severity Level)' clause defines how to calculate certain outcomes or remedies based on the severity of a problem encountered under the agreement. Typically, this clause outlines a method for quantifying impacts, such as service credits or penalties, by assigning different values or responses depending on whether an issue is classified as low, medium, or high severity. By providing a clear calculation method tied to problem severity, the clause ensures transparency and consistency in addressing issues, helping both parties understand the consequences of service failures and reducing disputes over how remedies are determined.
Example Calculation (Using Problem Severity Level. 1 – 2).
(a) Total Problems during the reporting month equal 68.
(b) Total Problems failing the Standard of 100% equal 3.
(c) Percentage Problem Response is calculated as follows: ((68 – 3) / 68) * 100 = 95.59%
(d) The threshold of 99.01% less the Percentage Problem Response of 95.59% = 3.42%. The difference is greater than a 3% reduction but is less than a 4% reduction; therefore, SVCE is due 3% of the Services Fees as a Performance Credit.