Regulation 19D Novated contract priceF1

(1)

The novated contract method of determining the price of a qualifying defence contract may be used in the circumstances specified in paragraph (3).

(2)

Where the novated contract method is used, the price is determined in accordance with paragraph (4).

(3)

The novated contract method may be used if—

(a)

a contract (B) replaced a contract (A);

(b)

the purpose of contract B is to ensure the performance of contractual obligations which were to be performed under contract A;

(c)

contract A was a qualifying defence contract;

(d)

at least one of the parties to contract A is also a party to contract B;

(e)

at least one of the parties to contract B was not a party to contract A; and

(f)

contract B is in all material respects (save for the identity of the parties to the contract) identical to contract A.

(4)

The price determined for contract B is the price payable in respect of contract A.

(5)

For the purposes of these Regulations—

(a)

contract B is to be treated as if its price was determined in accordance with the contract pricing method in accordance with which the price of contract A was determined; and

(b)

where contract A contained components, each component of contract B is to be treated as if its price was determined in accordance with the contract pricing method in accordance with which the equivalent component of contract A was determined.

Annotations

Textual amendments

F1: Pt. 3 Ch. 3 inserted (1.4.2024) by The Single Source Contract (Amendment) Regulations 2024 (S.I. 2024/420), regs. 1(2), 24