Regulation 11 Insertion of regulation 9A (components of qualifying defence contracts)

After regulation 9 insert—

Components of qualifying defence contracts

9A

(1)

A part of a qualifying defence contract is a component of the contract if—

(a)

that part uses a different contract pricing method to the contract pricing method used in any other part of the contract;

(b)

that part has a different contract profit rate to the contract profit rate used in any other part of the contract;

(c)

that part is a component by virtue of regulation 19C(6) or paragraph 14(7)(c) or 16(2)(b) of the Schedule.

(2)

For the purposes of section 15(8), the parties to a contract may not agree that a part of a contract is a component of the contract unless they can demonstrate a commercial purpose for such agreement other than to affect the amount of any final price adjustment determined under regulation 16.