The Single Source Contract Regulations 2014

PART 9 U.K. SSRO: opinions and determinations

[F1 Matters on which the SSRO must give an opinion U.K.

51.— (1) The matters relating to a proposed contract which are specified for the purposes of section 35(1)(a) (matters on which the SSRO must give an opinion) are—

(a) where the proposed contract is to be priced using a default pricing method—

(i) the appropriate amount of adjustment that should be made under step 2 or 4 of regulation 11;

(ii) the appropriate amount of a group cost risk adjustment (regulation 13(2)), the deduction from costs associated with group profits (regulation 13(4)) or group capital servicing adjustment (regulation 13(5));

(iii) any question relevant to the cost recovery rates that should be used to estimate likely allowable costs;

(iv) the extent to which a particular cost would be an allowable cost;

(b) where the proposed contract is to be priced using an alternative pricing method—

(i) whether the circumstances specified for the use of the alternative pricing method exist;

(ii) whether the price has been determined in accordance with the alternative pricing method;

(c) whether any part of the proposed contract should be treated as a component of the contract because the conditions in regulation 9A(1) are met in relation to that part.

(2) The matters relating to a contract which are specified for the purposes of section 35(1)(a) are—

(a) if the contract price were to be re-determined under Part 2 of the Schedule, the matters mentioned in paragraph (1)(a) (read as if a reference to the proposed contract were a reference to the contract);

(b) if the contract price were to be re-determined under Part 4 of the Schedule—

(i) whether the circumstances specified in Part 4 of the Schedule for the re-determination of the contract price exist;

(ii) whether the price has been re-determined in accordance with Part 4 of the Schedule or, where the Schedule requires the price to be re-determined using a contract pricing method, in accordance with that contract pricing method;

(c) if the contract is amended so as to add a new component and the price payable under the component is determined in accordance with an alternative pricing method, the matters mentioned in paragraph (1)(b) (read as if a reference to the proposed contract were a reference to the new component);

(d) if the contract price were to be re-determined under the Schedule, the matter mentioned in paragraph (1)(c) (read as if a reference to the proposed contract were a reference to the contract);

(e) whether the Secretary of State has acted reasonably in exercising a power to require the contractor to provide information under regulation 30 (on-demand contract report).]

Textual Amendments

F1 Reg. 51 substituted (1.4.2024) by The Single Source Contract (Amendment) Regulations 2024 (S.I. 2024/420), regs. 1(2), 39

Matters in relation to which the SSRO must make a determination U.K.

52.— [F2 (1) The matters relating to a contract which are specified for the purposes of section 35(1)(b) (matters in relation to which the SSRO must make a determination) are—

(a) the defined pricing structure and output metrics that the contractor must use in all reports provided under Part 5 for that contract;

(b) the matter mentioned in regulation 51(1)(c) (read as if a reference to the proposed contract were a reference to the contract).]

[F3 (2) A reference to the SSRO for a determination in relation to [F4 the matters mentioned in paragraph (1)(a)] must be made—

(a) where the contract is a qualifying defence contract by virtue of section 14(3)—

(i) no later than 6 months after the contract is entered into, or

(ii) if the contract is amended after it is entered into in a way that affects any of those matters, no later than 6 months after the contract is so amended;

(b) where the contract is a qualifying defence contract by virtue of section 14(4) or (5)—

(i) no later than 6 months after the amendment mentioned in section 14(4)(c) or (5)(b) (as the case may be) is made, or

(ii) if the contract is subsequently amended in a way that affects those matters, no later than 6 months after the contract is so amended.]

[F5 (3) A reference to the SSRO for a determination in relation to the matters mentioned in paragraph (1)(b) must be made within two years of the contract completion date or, if the reference is made in respect of a component, within two years of the component completion date.

(4) The SSRO must, on an application by a person within section 16(5) in relation to a qualifying defence contract, or a component of such a contract, which has been priced using an alternative pricing method (“the applicable pricing method”)—

(a) determine whether the price of that contract or a component has been properly determined in accordance with the applicable pricing method; and

(b) if the price was not properly determined, determine as nearly as possible what the price of the contract or component would have been if the price were properly determined in accordance with the applicable pricing method.

(5) An application for a determination under paragraph (4) must be made within two years of the contract completion date or, if the application relates to a component, within two years of the component completion date.

(6) The SSRO may, in consequence of a determination under paragraph (4)(a), determine that the price payable under the contract or component is to be adjusted by the amount required to achieve the price determined under paragraph (4)(b).

(7) The Secretary of State may not make a reference under paragraph (1) or an application under paragraph (4) unless—

(a) the Secretary of State has sent the primary contractor a written notice requiring the primary contractor to show that the requirements in relation to which the proposed reference or application is to be made have been met;

(b) at least 20 working days have elapsed since the date of that notice; and

(c) no response, or no response which the Secretary of State considers to be satisfactory, has been received.

(8) In making a determination under this regulation, the SSRO must have regard to—

(a) the information that was available to each party at the time of agreement;

(b) in the case of a contract which contains provision of the kind described in regulation 15 (TCIF adjustment), those provisions;

(c) in the case of a contract priced in accordance with a default pricing method, whether the parties disclosed, in a timely manner, the facts and assumptions they used to determine the allowable costs or the contract profit rate.]

Textual Amendments

F2 Reg. 52(1) substituted (1.4.2024) by The Single Source Contract (Amendment) Regulations 2024 (S.I. 2024/420), regs. 1(2), 40(a)

F3 Reg. 52(2) substituted (31.1.2019) by The Single Source Contract (Amendment) (No. 2) Regulations 2018 (S.I. 2018/1350), regs. 1(2), 4

F4 Words in reg. 52(2) substituted (1.4.2024) by The Single Source Contract (Amendment) Regulations 2024 (S.I. 2024/420), regs. 1(2), 40(b)

F5 Reg. 52(3)-(8) inserted (1.4.2024) by The Single Source Contract (Amendment) Regulations 2024 (S.I. 2024/420), regs. 1(2), 40(c) (with reg. 44(1))

Time limits for applications for opinions U.K.

53.—(1) An application for an opinion on whether the Secretary of State has acted unreasonably in exercising a power to require a contractor to provide information under regulation 30 (on-demand contract report) must be made within three months of the contractor receiving a written direction under paragraph (1) or (3) of that regulation.

(2) A reference under section 35(3)F6 ... (reference by Secretary of State and primary contractor for SSRO's opinion) [F7 which relates to a qualifying defence contract] must be made no later than two years after the contract completion date of the contract F8 ....

Textual Amendments

F6 Word in reg. 53(2) omitted (1.4.2024) by virtue of The Single Source Contract (Amendment) Regulations 2024 (S.I. 2024/420), regs. 1(2), 41(a)

F7 Words in reg. 53(2) inserted (1.4.2024) by The Single Source Contract (Amendment) Regulations 2024 (S.I. 2024/420), regs. 1(2), 41(b)

F8 Words in reg. 53(2) omitted (1.4.2024) by virtue of The Single Source Contract (Amendment) Regulations 2024 (S.I. 2024/420), regs. 1(2), 41(c)

Matters to which the SSRO must have regard in making determinations U.K.

54.  In making any determination under the Act or these Regulations, the SSRO must have regard (in addition to any other matter to which these Regulations require it to have regard) to—

(a) any regulations or statutory guidance made under Part 2 of the Act which were in force at any time material to the matters under consideration;

(b) the extent to which any relevant statutory guidance has been followed (and any justification advanced for not following it);

(c) the extent to which any person has fulfilled its responsibilities under Part 2 of the Act and these Regulations;

(d) any relevant previous decisions of the SSRO; and

(e) representations made by the parties to the contract (or the persons who would be parties to the proposed contract), and (where not such a party or person) by the Secretary of State.

References in relation to contracts entered into before the relevant date U.K.

55.—(1) A reference under section 35(7) (contracts entered into before the relevant date) may be made no later than two years after—

(a) the date described in the contract as the contract completion date;

(b) if no such date is described in the contract, the date on which the contractor completes all obligations which entitle it to final payment under the contract; or

(c) if the contract is terminated before either of the dates described in (a) or (b), the date that the contract is terminated.

(2) In making a determination or giving an opinion under section 35(7), the SSRO must have regard to—

(a) any relevant published decisions of the Review Board for Government Contracts;

(b) the Government Profit Formula and Associated Arrangements in force at the date the contract was entered into;

(c) the terms of the contract; and

(d) representations made by the parties to the contract and, where not a party to the contract, the Secretary of State.