Amendment of regulation 10 (pricing of contracts)
13. 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).”.