Price per mile variance
When an operator is awarded an educational transport contract they will be asked to provide their price per mile variance (PPMV).
What is this - This is the price Lincolnshire County Council will pay an operator to adjust their milage for a contract by 5% or more either above or below the base mileage at the point the contract was awarded. There will need to be a PPMV provided for adding mileage on and for mileage being removed. Note LCC will always use the base milage to work out the PPMV, regardless of possible changes before, the base mileage will always be used to work out a revised rate.
Value - It is up to the operator to determine the PPMV they provide when being awarded a contract, but if deemed too high there is a chance the contract will not be awarded and put out for tender again. We advise your PPMV for mileage taken off is 50% of the PPMV for mileage being added. For example £2 for additional mileage, £1 to remove mileage.
Example 1
Contract base rate £200 per day
Contract base mileage at the point the contract was awarded : 100 miles
PPMV : Add on £2 / Take off £1
Amendment 1 :
Passenger removed, reducing revised contract milage by 20 miles.
Calculation :
£200 - (20 x £1 PPMV) = Revised contract rate £180
Example 2
Contract base rate £200 per day
Contract base mileage at the point the contract was awarded : 100 miles
PPMV : Add on £2 / Take off £1
Amendment 2 :
3 Passengers added on increasing the contracted milage by 20 miles.
Calculation :
£200 + (20 x £2 PPMV) = Revised contract rate £240