This Appendix is not intended to be a definitive list but a guide to assist those considering agreement of SPV profit rates. Agreement with individual Special Purpose Vehicles (SPVs) will be reached on the basis of their approach to risk and the methodology applied to the calculation of profit rates by that contractor in building prices for work to be undertaken.
1. This Appendix identifies types of risk associated with PPP/PFI changes. For each risk identified consideration is given to whether it is more appropriate for the cost of this risk to be included in an element of the cost for a change or to the profit element. This is considered for the following two scenarios:
• if this is a change to an existing part of the service provided under the contract (e.g. replacing an existing Global Positioning System with a new GPS). This is called a Replacement Change throughout this Appendix;
• if the change increases the scope of the service provided under the contract e.g. if the change adds GPS functionality where none previously existed. This is called as Addition Change throughout this Appendix.
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31 This is a slightly amended and abridged version of Annex A to the Flight Simulation and Synthetic Trainers (FsAST) acquisition team BP/C003 Issue 2. Changes have been made to fit in with the AOF Style template and the Guidance elsewhere in the document.