Skip to main content

Military Equipment: Prices

Volume 476: debated on Monday 2 June 2008

To ask the Secretary of State for Defence if he will place in the Library copies of the variation of prices index used in the (a) A400M and (b) BVRAAM contracts. (207054)

The A400M and BVRAAM programmes do not use fixed variation of price indices.

The A400M programme uses an output index in the form of the Eurozone gross domestic product (GDP) deflator, as published monthly by the Statistical Office of the European Union (otherwise known as EUROSTAT). The Eurozone GDP deflator then in force is applied to each invoice at the time it is presented.

The BVRAAM programme uses a number of indices based on national price inflation series, as published by the governments of the partner nations. The UK index is based on the producer price index (MM2), published monthly by the Office for National Statistics. The indices applied are those in force either one month before the programme milestone point to which an invoice applies, or at a contractually defined date, depending on the category of deliverable item to which the invoice applies.