Contract Profit Rate guidance

Contents: The price of a qualifying contract is determined in accordance with the formula: (Contract profit rate × Allowable Costs) + Allowable Costs. This part of the SSRO's guidance covers the contract profit rate, whose requirements are set out in section 17.

Contents

• 1. Introduction to the Contract Profit Rate

• 2. Baseline profit rate (step 1)

• 3. Cost risk adjustment (step 2)

• 4. Profit on cost once adjustment (step 3)

• 5. SSRO funding adjustment (step 4)

• 6. Incentive adjustment (step 5)

• 7. Capital servicing adjustment (step 6)