[F1Change to an element of allowable costsU.K.
Textual Amendments
Amendment affecting a defined element of allowable costsU.K.
6.—(1) This paragraph applies where—
(a)the proposed pricing amendment will change a defined element of allowable costs under the contract or a defined component of the contract, and
(b)the regulated pricing method used for the contract or the defined component (as the case may be) is a qualifying regulated pricing method.
(2) In this paragraph “qualifying regulated pricing method” means a pricing method described—
(a)in regulation 10(4) (firm pricing method),
(b)in regulation 10(5) (fixed pricing method),
(c)in regulation 10(9) and (10) (volume-driven pricing method), or
(d)in regulation 10(11) (target pricing method).
(3) The price payable in respect of the amendment must be determined in accordance with the following formula—
where—
“CPR” is the contract profit rate for the amendment, and
“AC” means the defined element of allowable costs after it is changed, determined in accordance with the qualifying regulated pricing method used for the contract or defined component.
(4) The price payable under the amended contract is the total of—
(a)the original contract price less the adjustment amount, and
(b)the price payable in respect of the amendment.
(5) For the purposes of sub-paragraph (4), “the adjustment amount” is the amount of the original contract price which can be attributed to the defined element of allowable costs that is being changed.]