F1SCHEDULERe-determination of contract price

PART 2Re-determination of price using a default pricing method

Change to an element of allowable costs

Amendment affecting a defined element of allowable costs

6.

(1)

This paragraph applies where—

(a)

the proposed pricing amendment will change a defined element of allowable costs under the contract or a F2... component of the contract, and

(b)

the F3default pricing method used for the contract or F4... component (as the case may be) is a qualifying F3default pricing method.

(2)

In this paragraph “qualifying F5default 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 F6pricing amendment must be determined in accordance with the following formula—

(CPR×AC)+AC

where—

  1. (a)

    “CPR” is the contract profit rate for the F7pricing amendment, and

  2. (b)

    “AC” means the defined element of allowable costs after it is changed, determined in accordance with the qualifying F8default pricing method used for the contract or F9... 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 F10pricing 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.