Regulation 8 Insertion of regulation 7A (meaning of a new contract)

After regulation 7 insert—

Meaning of a new contract

7A

(1)

For the purposes of section 14 of the Act, a contract between the Secretary of State and the primary contractor for additional goods, works or services is not to be treated as amending an existing contract (and therefore is a new contract) if paragraph (2) or (3) applies.

(2)

This paragraph applies where—

(a)

the parties have an existing contract and wish the primary contractor to provide additional goods, works or services;

(b)

the same, or substantially the same, commercial outcome could be achieved either by—

(i)

amending the existing contract to include the additional goods, works or services; or

(ii)

procuring the additional goods, works or services under a separate contract without making disproportionately numerous or complex amendments to the existing contract;

(c)

procuring the additional goods, works or services under a separate contract would not give rise to unavoidable and material—

(i)

additional commercial risk; or

(ii)

duplication of costs or resource; and

(d)

the additional goods, works or services are not subject to a relevant pricing restriction.

(3)

This paragraph applies if a contract is amended in such a way as to amount in effect to termination of that contract and the creation of a new contract.

(4)

For the purposes of section 14(4)(d) and (5)(d) of the Act, the Secretary of State and the primary contractor may agree to treat a contract that they have entered into as amending an existing contract.

(5)

For the purposes of paragraph (2)(b), any difference in commercial outcome which arises as a result of having to comply with the requirements of the Act and these Regulations is to be disregarded. 

(6)

For the purposes of paragraph (2)(d), a relevant pricing restriction exists if paragraph (7) or (8) applies.

(7)

This paragraph applies if—

(a)

the award of the contract was the result of a competitive process;

(b)

the contract specifies the way in which the price of the additional goods, works or services is to be determined;

(c)

the manner of determining the price was agreed when the contract was entered into; and

(d)

the way in which the price is determined is incompatible with the way in which the price may be calculated in accordance with the Act and these Regulations.

(8)

This paragraph applies if—

(a)

the award of the contract was not the result of a competitive process;

(b)

the contract specifies the way in which the price of the additional goods, works or services is to be determined;

(c)

the manner of determining the price was agreed prior to the relevant date^f1; and

(d)

the way in which the price is determined is incompatible with the way in which the price may be calculated in accordance with the Act and these Regulations.