Regulation 19F Agreed changes to the contract profit rateF1
The agreed change to the contract profit rate price method of determining the price of a qualifying defence contract or component of such a contract may be used in the circumstances specified in paragraph (3).
Where the agreed change to the contract profit rate price method is used, the price is determined in accordance with paragraph (4).
The agreed change to the contract profit rate price method may be used if the contract price was originally determined or re-determined using a default pricing method, and either—
an error has been identified in the determination of the contract profit rate in accordance with regulation 11; or
the parties agree that an adjustment should be made to the contract profit rate in accordance with regulation 11(6) (“the step 3 incentive adjustment”).
The method of determining the price is—
in the circumstances described in paragraph (3)(a), for the price to be adjusted by an amount which ensures that the contract profit rate is as it would have been if the error had not been made;
in the circumstances described in paragraph (3)(b), for the price to be adjusted to reflect the change to the step 3 incentive adjustment agreed between the parties.
The price of the contract or component is to be treated for the purposes of these Regulations as if it was determined in accordance with the default pricing method which applied to the contract or component immediately before its price was determined in accordance with this regulation.
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