Any excess profit must be handed back (it's a thing called "QMAC"). But while the MOD cap profits they generously allow losses to be of any size.
Well said. I recall, in 1999, we were gathered together and told that CDP's favourite contractor was anticipating a loss that year, so stop applying pressure to meet contractual commitments, let them deliver crap (or nothing at all), sign the invoices (i.e. commit fraud) and money would be made available to contract someone else to fix it (again, fraud).