What we have here is a change to the Service Information an Instruction under clause 14.3 this gives the Service Manager the authority to give an instruction to change the Service Information. Clause 27.3 the Contractor obeys an instruction which is in accordance with the contract. It is a compensation event under clause 60.1.1 instruction given by the Service Manager to change the Service Information.
If we presume that the Contractor was to put the instruction into immediate affect then the provision of this service should have ceased as soon as reasonably possible.
Indeed in assessing a compensation event 63.8 the assumption is that the Contractor reacts competently and quickly.
So the above is one half of the equation on a target contract the other is the actual Defined Cost.
The definition of Defined Cost in the TSC is very simple with only four components. it is a requirement of the Contractor to meet the requirements of the law in terms of employing people so any redundancy payment made in relation to people on a contract is Defined Cost.
Not sure that this instance is a Disallowed Cost 11.2(6) as this has a very specific meaning. It is more the fact that the payments are not Defined Cost for Providing the Works.
it will be interesting to get others views on this