Part 2Single source contracts

Pricing of contracts

19Rates etc relevant to determining contract profit rate

(1)

The Secretary of State must, for each financial year, determine—

  • the baseline profit rate,

  • F1...

  • the capital servicing rate for fixed capital, and

  • the capital servicing rate for working capital.

(2)

For the purpose of assisting the Secretary of State in determining for a financial year each of the rates mentioned in subsection (1) F2..., the SSRO must provide the Secretary of State with its assessment of what is the appropriate rate F3... for that year.

(3)

The SSRO—

(a)

must provide its assessment to the Secretary of State no later than 31 January in the preceding financial year, and

(b)

must, in preparing its assessment, have regard to such matters as may be specified in guidance issued by the Secretary of State (as well as other matters that appear to the SSRO to be relevant).

(4)

The Secretary of State must publish each of the rates mentioned in subsection (1) for a financial year F4... in the London Gazette no later than 15 March in the preceding financial year.

(5)

Subsection (6) applies if, in the case of a particular rate F5..., there is a difference between the rate F6... determined under subsection (1) and the SSRO's assessment of the appropriate rate F6... for the financial year in question.

(6)

The Secretary of State must, when publishing the relevant rate F7..., also publish reasons for the difference.