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The Single Source Contract Regulations 2014

United Kingdom · regulation

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In force since 2026-06-05, as the publisher states.

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Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.

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Contents: 82 provisions
  1. Title and introductory text
  2. 1 Citation and commencement
  3. 2 Interpretation
  4. 3 Meaning of “defence purposes” and “substantially for defence purposes”)
  5. 4 Meaning of “contract completion date” and “component completion date”
  6. 4A Meaning of “contract price”
  7. 5 Calculating the value of a contract
  8. 6 Threshold value for qualifying defence contracts
  9. 7 Contracts that may not be qualifying defence contracts
  10. 7A Meaning of a new contract
  11. 8 Competitive process for single contracts
  12. 9 Competitive process for contracts made under a framework agreement
  13. 9A Components of qualifying defence contracts
  14. 9B Contract pricing methods
  15. 9C Re-determination of contract price
  16. 10 Default pricing of contracts
  17. 11 Steps in determining contract profit rate
  18. 12 Calculation of profit on cost once (“POCO”) adjustment
  19. 13 Rates agreed on a group basis
  20. 13A Costs associated with group profits
  21. 14 Re-determination of contract price
  22. 15 Target cost incentive fee (“TCIF”) adjustment
  23. 16 Procedure for determining final price adjustment
  24. 17 Calculation of final price adjustment
  25. 18 Determination of contract profit rate adjustments
  26. 19 Determination of allowable costs
  27. 19A Commercial pricing
  28. 19B Prices determined in accordance with law
  29. 19C Previously agreed price
  30. 19D Novated contract price
  31. 19E Competed rates applied to uncompeted volumes
  32. 19F Agreed changes to the contract profit rate
  33. 19G Aggregation of components
  34. 20 Duty to keep relevant records
  35. 21 Examination of relevant records
  36. 22 General requirements and interpretation
  37. 23 Contract pricing statement
  38. 24 Contract reporting plan
  39. 25 Contract notification report
  40. 26 Quarterly contract report
  41. 27 Interim contract report
  42. 27A Component completion report
  43. 28 Contract completion report
  44. 29 Contract costs statement
  45. 30 On-demand contract report
  46. 31 Application of this Part
  47. 32 Interpretation
  48. 33 General requirements
  49. 34 Actual rates claim report
  50. 35 QBU actual cost analysis report
  51. 36 Estimated rates claim report
  52. 37 QBU estimated cost analysis report
  53. 38 Estimated rates agreement pricing statement
  54. 39 Rates comparison report
  55. 40 Strategic industry capacity report: general requirements
  56. 41 Strategic industry capacity report: corporate structure
  57. 42 Strategic industry capacity report: activities, people and infrastructure
  58. 43 Strategic industry capacity report: forecast costs of maintaining industrial capacity
  59. 44 Strategic industry capacity report: capacity and supply chain
  60. 45 Small or medium enterprises (“SME”) report
  61. 46 Disapplication of requirements to give information
  62. 47 Reference to SSRO to investigate obligation of confidentiality
  63. 48 Contraventions of section 31
  64. 49 Time limits for compliance notices and penalty notices
  65. 50 Maximum penalties
  66. 51 Matters on which the SSRO must give an opinion
  67. 52 Matters in relation to which the SSRO must make a determination
  68. 53 Time limits for applications for opinions
  69. 54 Matters to which the SSRO must have regard in making determinations
  70. 55 References in relation to contracts entered into before the relevant date
  71. 56 Information specified for the purposes of paragraph 1(1)(c) of Schedule 5
  72. 57 Interpretation
  73. 58 Requirements for qualifying sub-contracts
  74. 59 Competitive process for single sub-contracts
  75. 60 Competitive process for sub-contracts made under a framework agreement
  76. 61 Assessing whether a contract would be a qualifying sub-contract
  77. 62 Appeal against assessment
  78. 63 Cessation of application to qualifying sub-contracts
  79. 64 Modifications of Part 2 of the Act
  80. 65 Modifications of these Regulations
  81. 66 Price adjustments for qualifying sub-contracts
  82. SCHEDULE Re-determination of contract price

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82 provisions

66 Price adjustments for qualifying sub-contracts

Where the amount of an adjustment to the contract price of a qualifying sub-contract is determined by the SSRO under regulation 16(7) or calculated under regulation 17— (a) the contract price is not to be adjusted by that amount; and (b) a payment for that amount must be made by the Secretary of State to the sub-contractor or by the sub-contractor to the Secretary of State (whichever is appropriate).

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SCHEDULE Re-determination of contract price

Regulation 9C PART 1 General Application of Schedule 1. (1) This Schedule applies if the parties to a qualifying defence contract propose to amend the contract in a way that would affect the original contract price. Such an amendment is referred to in this Schedule as a “pricing amendment” of the contract or a component of the contract. (2) In this Schedule— “original contract price”, in relation to a qualifying defence contract or component of such a contract, means— the price determined in accordance with a contract pricing method, or where the contract or component has previously been amended in a way that affects the price payable under the contract or component, the price determined or, as the case may be, last determined in accordance with this Schedule; “the parties”, in relation to a qualifying defence contract, means— the Secretary of State, and the primary contractor. Interpretation 2. (1) In this Schedule— “contract profit rate”, in relation to a pricing amendment, means the contract profit rate that would be determined for the pricing amendment in accordance with regulation 11 as it applies for the purpose of determining the contract profit rate for a contract or component, and regulation 11(3) is modified for these purposes so that “under the contract or component” is to be read as “associated with the pricing amendment”; ... “contractual requirement”, in relation to a qualifying defence contract or component of such a contract, means a provision of the contract or component setting out— the specification of, quantity of, or time or place for delivery of, the goods, works or services procured under the contract; “cost-plus method” means the default pricing method described in regulation 10(6); “original contract price” has the meaning given in paragraph 1(2); “the parties” has the meaning given in paragraph 1(2); ... (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pricing amendments not covered by Part 2 or 4 2A (1) This paragraph applies if none of paragraphs 4 to 9 or 14 to 18 apply in relation to the pricing amendment. (2) Where the pricing amendment creates a new component of a contract, the price payable under the component must be determined in accordance with a contract pricing method (and is to be treated for the purposes of these Regulations as if it was determined in accordance with that contract pricing method and not this Schedule). (3) Where the pricing amendment does not create a new component, the price payable under the amended contract or, where the pricing amendment relates to an existing component, that component must be re-determined in accordance with a contract pricing method (and is to be treated for the purposes of these Regulations as if it was determined in accordance with that contract pricing method and not this Schedule). (4) The parties— (a) may agree which contract pricing method is to be used for the amended contract or component; (b) may agree that components of the contract will be priced by different pricing methods. Multiple pricing amendments 2B (1) This paragraph applies where the parties propose to make two or more pricing amendments to a contract or component at the same time (irrespective of whether the parties also propose to make, at the same time, any other amendment to the contract or component which is not a pricing amendment). (2) Where this paragraph applies— (a) the pricing amendments are to be treated separately and dealt with in turn, (b) Part 2 or 4 (as the case may be) applies in relation to each pricing amendment as it applies to a single amendment, and (c) the price payable under the amended contract or component is the price determined after the last of the pricing amendments has been dealt with. (3) If the parties propose a pricing amendment which changes the contract pricing method used for the contract or component, that pricing amendment must be dealt with first. (4) If the parties propose a pricing amendment to which paragraph 2A applies, that pricing amendment must be dealt with last. PART 2 Re-determination of price using a default pricing method Application of Part 2 3. This Part applies to determine the price payable under a contract or component if— (a) the parties propose to make a single pricing amendment to a qualifying defence contract (irrespective of whether the parties propose to make, at the same time, any other amendment to the contract which is not a pricing amendment), and (b) the price of the contract (if the pricing amendment does not relate to an existing component) or component (if the pricing amendment relates to an existing component) to which the pricing amendment relates was last determined in accordance with a default pricing method or with this Part. Change of default pricing method Amendment of the default pricing method used for a qualifying defence contract 4. (1) This paragraph applies where the proposed pricing amendment will change the default pricing method used for the contract to another default pricing method (the “new default pricing method”). (2) The price payable in respect of the pricing amendment must be determined in accordance with the following formula— (CPR×AC)+AC where— “CPR” is the contract profit rate for the pricing amendment, and “AC” means the primary contractor’s allowable costs after the time of agreement, determined in accordance with the new default pricing method. (3) The price payable under the amended contract is the total of— (a) the price payable in respect of performance under the contract on or before the time of agreement, and (b) the price payable in respect of the pricing amendment. Amendment of a default pricing method used for a ... component of a contract 5. (1) This paragraph applies where the proposed pricing amendment will change the default pricing method used for a ... component of the contract to another default pricing method (the “new default pricing amendment”). (2) The price payable in respect of the pricing amendment must be determined in accordance with the following formula— (CPR×AC)+AC where— “CPR” is the contract profit rate for the pricing amendment, and “AC” means the primary contractor’s allowable costs under the ... component after the time of agreement, determined in accordance with the new default pricing method. (3) The price payable under the amended contract is the total of— (a) the price payable for performance under the contract (other than performance under the relevant ... component), (b) the price payable for performance under the relevant ... component on or before the time of agreement, and (c) the price payable in respect of the pricing amendment. Change to an element of allowable costs Amendment affecting a defined element of allowable costs 6. (1) This paragraph applies where— (a) the proposed pricing amendment will change a defined element of allowable costs under the contract or a ... component of the contract, and (b) the default pricing method used for the contract or ... component (as the case may be) is a qualifying default pricing method. (2) In this paragraph “qualifying default pricing method” means a pricing method described— (a) in regulation 10(4) (firm pricing method), (b) in regulation 10(5) (fixed pricing method), (c) in regulation 10(9) and (10) (volume-driven pricing method), or (d) in regulation 10(11) (target pricing method). (3) The price payable in respect of the pricing amendment must be determined in accordance with the following formula— (CPR×AC)+AC where— “CPR” is the contract profit rate for the pricing amendment, and “AC” means the defined element of allowable costs after it is changed, determined in accordance with the qualifying default pricing method used for the contract or ... component. (4) The price payable under the amended contract is the total of— (a) the original contract price less the adjustment amount, and (b) the price payable in respect of the pricing amendment. (5) For the purposes of sub-paragraph (4), “the adjustment amount” is the amount of the original contract price which can be attributed to the defined element of allowable costs that is being changed. Change to a contractual requirement Change to a contractual requirement: contract or ... component not using cost-plus method 7. (1) This paragraph applies where— (a) the proposed pricing amendment will change a contractual requirement of the contract or of a ... component of the contract, and (b) the default pricing method used for the contract or ... component (as the case may be) is not the cost-plus method. (2) The price payable in respect of the pricing amendment must be determined in accordance with the following formula and may be a negative amount— (CPR×AC)+AC where— “CPR” is the contract profit rate for the pricing amendment, and “AC” means the amount (which may be a negative amount) by which the pricing amendment will change the original allowable costs. (3) For the purposes of sub-paragraph (2), “original allowable costs” means the allowable costs under the contract or ... component, as determined for the purposes of calculating the original contract price. (4) The price payable under the amended contract is the total of— (a) the original contract price, and (b) the price payable in respect of the pricing amendment. Change to a contractual requirement: contract or ... component which uses cost-plus method – distinguishable costs 8. (1) This paragraph applies where— (a) the proposed pricing amendment will change a contractual requirement of the contract or of a ... component of the contract, (b) the default pricing method used for the contract or ... component (as the case may be) is the cost-plus method, and (c) the allowable costs resulting from the pricing amendment can be distinguished from the original allowable costs. (2) For the purposes of sub-paragraph (1)(c), “original allowable costs” means the allowable costs under the contract or ... component before the contract is amended. (3) The price payable in respect of the pricing amendment is to be determined in accordance with the following formula— (CPR×AC)+AC where— “CPR” is the contract profit rate for the pricing amendment, and “AC” means the primary contractor’s allowable costs resulting from the pricing amendment, as determined in accordance with the cost-plus method. (4) The price payable under the amended contract is the total of— (a) the original contract price, and (b) the price payable in respect of the pricing amendment. Change to a contractual requirement: contract or ... component which uses cost-plus method – costs not distinguishable 9. (1) This paragraph applies where— (a) the proposed pricing amendment will change a contractual requirement of the contract or of a ... component of the contract, (b) the default pricing method used for the contract or ... component (as the case may be) is the cost-plus method, and (c) the allowable costs resulting from the pricing amendment cannot be distinguished from the original allowable costs. (2) For the purposes of sub-paragraph (1)(c), “original allowable costs” means the allowable costs under the contract or ... component before the contract is amended. (3) The price payable in respect of the pricing amendment is to be determined in accordance with the following formula— (CPR×AC)+AC where— “CPR” is the contract profit rate for the pricing amendment, and “AC” means the primary contractor’s allowable costs under the contract, or ... component, after the time of agreement, as determined in accordance with the cost-plus method. (4) For the purposes of sub-paragraph (3), no account is to be taken of any costs incurred by the primary contractor before the contract is amended. (5) The price payable under the amended contract is the total of— (a) the price payable under the contract on or before the time of agreement, and (b) the price payable in respect of the pricing amendment. ... Other amendments 10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part 4 Re-determination of price using an alternative pricing method Application of Part 4 13 This Part applies to determine the price payable under a contract or component if— (a) the parties propose to make a single pricing amendment to the contract or component (irrespective of whether the parties propose to make, at the same time, any other amendment to the contract or component which is not a pricing amendment), and (b) the price of the contract (if the pricing amendment does not relate to a component) or component (if the pricing amendment relates to a component) was last determined in accordance with an alternative pricing method or with this Part. Pricing amendment of contract or component priced using regulation 19A (commercial pricing) 14 (1) This paragraph applies where the proposed pricing amendment is to a contract or component the price of which was determined in accordance with regulation 19A or this paragraph. (2) Sub-paragraph (3) applies where— (a) the pricing amendment will add a contractual requirement for the provision of goods, works or services (“the new goods, works or services”), (b) if the pricing amendment were a new contract or component, the circumstances would exist for the price of the pricing amendment to be determined in accordance with regulation 19A, and (c) the parties agree to determine the price of the pricing amendment in accordance with regulation 19A. (3) The price payable in respect of the pricing amendment is to be determined as follows— (a) determine the price of the new goods, works or services in accordance with regulation 19A, and (b) adjust that price by a reasonable amount to account for a change in the costs of providing the new goods, works or services as a consequence of any existing requirements under the contract to provide similar goods, works or services. (4) Sub-paragraph (5) applies where— (a) the pricing amendment will remove a contractual requirement for the provision of goods, works or services (“the removed requirement”), and (b) no costs have been, or will be, incurred in relation to the provision of the removed requirement. (5) The price payable under the contract or component to which the pricing amendment relates is to be determined as follows— (a) determine what price payable would have been determined in accordance with regulation 19A in respect of the contract or component at the time of agreement taking into account the removed requirement, and (b) adjust the price payable under the contract or component so that it is equivalent to the price determined in accordance with paragraph (a). (6) Sub-paragraph (7) applies where— (a) the pricing amendment will remove a contractual requirement for the provision of goods, works or services (“the removed requirement”), and (b) costs have been, or will be, incurred in relation to the reduced requirement (“the incurred costs”). (7) Where this paragraph applies— (a) the price payable under the contract or component to which the pricing amendment relates is to be determined in accordance with paragraph (5), (b) the price payable in respect of the incurred costs is to be determined in accordance with another contact pricing method as if the goods, works or services to which those costs relate were provided under a new component, and (c) the provision of the goods, works or services and the price payable in respect of them are a new component the price of which has been determined in accordance with the contract pricing method mentioned in paragraph (b) (and not in accordance with regulation 19A or this Schedule). Pricing amendment of contract or component priced using regulation 19B (prices determined in accordance with law) 15 (1) This paragraph applies where the proposed pricing amendment is to a contract or component the price of which was determined in accordance with regulation 19B or this paragraph. (2) Sub-paragraph (3) applies where— (a) the original contract price was determined in accordance with regulation 19B(3), and (b) regulation 19B(3) applies to the goods, works and services to which the pricing amendment relates. (3) The price payable under the contract or component is to be re-determined in accordance with regulation 19B(3), taking account of the pricing amendment. (4) Sub-paragraph (5) applies where— (a) the original contract price was determined in accordance with regulation 19B(4), (b) the relevant law in accordance with which the original contract price was determined has been amended (but still applies), and (c) the pricing amendment is made entirely in consequence of the amendment to the relevant law. (5) The price payable under the contract or component to which the pricing amendment relates is to be adjusted by an amount which secures a price as close as possible to the price which would have been agreed between the parties in compliance with the Act and these Regulations but for the application of the amended relevant law. (6) Sub-paragraph (7) applies where— (a) the original contract price was determined in accordance with regulation 19B(4), (b) regulation 19B(4) applies to the goods, works and services to which the pricing amendment relates, and (c) the pricing amendment is not made entirely in consequence of an amendment to the relevant law in accordance with which the original contract price was determined. (7) The price payable under the contract or component is to be re-determined in accordance with regulation 19B(4), taking account of the pricing amendment. (8) Sub-paragraph (9) applies where— (a) the pricing amendment will remove a contractual requirement for the provision of goods, works or services (“the removed requirement”), and (b) the Secretary of State is no longer satisfied that the price of the goods, works or services to be provided under the contract or component subject to the pricing amendment must be set in accordance with a relevant law (within the meaning of regulation 19B(5)). (9) The price payable under the contract or component to which the pricing amendment relates is to be determined as follows— (a) determine what price payable would have been determined in accordance with regulation 19B in respect of the contract or component at the time of agreement taking into account the removed requirement, and (b) adjust the price payable under the contract or component so that it is equivalent to the price determined in accordance with paragraph (a). Pricing amendment of contract or component priced using regulation 19C (previously agreed price) 16 (1) This paragraph applies where the proposed pricing amendment is to a contract or component the price of which was determined in accordance with regulation 19C. (2) The parties must agree to— (a) re-determine the price of the entire contract or component (taking account of any change to the contract or component as a result of the pricing amendment) in accordance with a contract pricing method other than that described in regulation 19C, or (b) create a new component containing the obligations to provide goods, works or services which have not yet been performed under the contract or component (taking account of any change to those obligations as a result of the pricing amendment), and determine the price of that component in accordance with a contract pricing method other than that described in regulation 19C. (3) Where— (a) the price of a contract or component is re-determined under sub-paragraph (2)(a), the contract or component is to be treated for the purposes of these Regulations as a contract or component the price of which has been determined in accordance with the new contract pricing method (and not in accordance with regulation 19C or this Schedule); (b) a component is created in accordance with sub-paragraph (2)(b), the component is a new component the price of which has been determined in accordance with the new contract pricing method (and not in accordance with regulation 19C or this Schedule). Pricing amendment of contract or component priced using regulation 19E (competed rates applied to uncompeted volumes) 17 Where the proposed pricing amendment is to a contract or component the price of which was determined in accordance with regulation 19E, the price of the contract or component is to be re-determined in accordance with regulation 19E (taking account of any change to the contract or component as a result of the pricing amendment). Pricing amendment of a contract priced using regulation 19G (aggregation of components) 18 (1) This paragraph applies where the price of a contract has been determined in accordance with regulation 19G or this paragraph. (2) Where the price payable under a component of the contract has been re-determined under this Schedule, the price of the contract is to be re-determined in accordance with regulation 19G. (3) Where the pricing amendment relates only to a change to an adjustment agreed in accordance with regulation 19G(3) to (7), the price payable under the contract is to be adjusted to take account of that change.

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