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A performance contract in which the provider is paid from the savings achieved requires above all

  • A.a government subsidy to underwrite the risk
  • B.an agreed baseline and verification method
  • C.the highest available grade of equipment
  • D.the client's consumption to be constant

Answer: B

Both parties must agree in advance what would have happened without the project and how the difference will be measured, or the payment becomes a dispute. That agreement is the substance of such a contract and the reason verification protocols exist.

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