Regulation 13 Amendment of regulation 10 (pricing of contracts)

In regulation 10—

(a)

in the heading, for “Pricing” substitute “Default pricing”;

(b)

in paragraph (1)—

(i)

after “qualifying defence contract” insert “or component of such a contract”;

(ii)

in sub-paragraph (a), after the second instance of “contract” insert “or component”;

(iii)

in sub-paragraph (b), for “regulated” substitute “default”;

(c)

omit paragraphs (2) and (3);

(d)

in paragraph (6), at the end insert “or component completion date”;

(e)

for paragraph (7) substitute—

“(7)

Under the estimate-based fee pricing method, the allowable costs by which the CPR is multiplied are the allowable costs as—

(a)

estimated at the time of agreement; and

(b)

may be adjusted in accordance with changes in specified indices or rates between the time of agreement and a specified time (and different times, indices or rates may be specified in relation to different allowable costs).”;

(f)

in paragraph (8), at the end insert “or component completion date”;

(g)

in paragraph (9), at the end insert “or component”;

(h)

for paragraph (11) substitute—

“(11)

Under the target pricing method, the allowable costs—

(a)

must be estimated at the time of agreement;

(b)

may be, or may include, allowable costs per unit of volume multiplied by the actual volume of output of the contract or component; and

(c)

may be adjusted in accordance with changes in specified indices or rates between the time of agreement and a specified time (and different times, indices or rates may be specified in relation to different allowable costs).”.