Commentary on Sections Part 2: Single Source Contracts Section 16: Pricing of contracts: supplementary
61.This section makes specific provision for the use of the pricing formula at section 15(4) when it is used for TCIF contracts. For such contracts subsection (1)(a) allows for the price determined in accordance with section 15 to be taken as the target price for the contract and subsection (1)(b) allows for the total price payable to be determined by the terms of the contract between the parties, or in the absence of such agreement, by the SSRO. A similar price adjustment mechanism also exists for other contract types (provided for by section 21), so subsection (3) disapplies section 21 for TCIF contacts.