Search Legislation

The Single Source Contract Regulations 2014

 Help about what version

What Version

 Help about opening options

Opening Options

Status:

This is the original version (as it was originally made).

Calculation of profit on cost once (“POCO”) adjustment

This section has no associated Explanatory Memorandum

12.—(1) This paragraph applies to a qualifying defence contract if, at the time of agreement, the primary contractor is party to, or proposes to enter into, a group sub-contract.

(2) Where paragraph (1) applies to a qualifying defence contract, and the Secretary of State is satisfied that—

(a)the allowable costs of that qualifying defence contract that relate to the price payable under any group sub-contract have been decreased by an amount equal to the attributable profit on that group sub-contract, and

(b)the allowable costs of that qualifying defence contract that relate to the price payable under any further group sub-contract which relates to the group sub-contract described in paragraph (a) have been decreased by an amount equal to the attributable profit on that further group sub-contract,

the POCO adjustment is zero.

(3) Where paragraph (1) applies to a qualifying defence contract, and the Secretary of State is not satisfied of the matters described in paragraph (2)—

(a)the parties may agree an amount by which the contract profit rate for that qualifying defence contract must be decreased in order to exclude the attributable profit that has been included;

(b)the POCO adjustment is the amount so agreed.

(4) Where paragraph (1) does not apply to a qualifying defence contract, the POCO adjustment is zero.

(5) “Group sub-contract” means a contract—

(a)the price payable under which includes an amount of profit;

(b)which is made between the primary contractor and any person associated with the primary contractor;

(c)the value of which is no less than £100,000;

(d)the award of which was not the result of a competitive process (as defined in regulation 59 or 60); and

(e)where the goods, works or services to be provided under the contract are necessary to enable the performance of the qualifying defence contract.

(6) “Further group sub-contract” means a contract—

(a)the price payable under which includes an amount of profit;

(b)which is made between two or more persons, each of which is associated with the primary contractor or a group sub-contractor;

(c)the value of which is no less than £100,000;

(d)the award of which was not the result of a competitive process (as defined in regulation 59 or 60); and

(e)where the goods, works or services to be provided under the contract are necessary to enable the performance of a group sub-contract or further group sub-contract.

(7) The attributable profit is—

(a)where all of the output of a group sub-contract or further group sub-contract is necessary to enable the performance of the qualifying defence contract, all the profit element in the price payable under that group sub-contract or further group sub-contract;

(b)where only part of the output of a group sub-contract or further group sub-contract is necessary to enable the performance of the qualifying defence contract, that part of the profit element in the price payable under that group sub-contract or further group sub-contract which relates to the output necessary for that performance.

(8) Attributable profit does not include—

(a)any capital servicing adjustment made under step 6 of regulation 11;

(b)any profit which is received by a person which is not associated with the primary contractor.

(9) In determining the value of a contract for the purposes of sub-paragraph (5)(c) or (6)(c) (as the case may be), paragraphs (5) to (12) of regulation 5 do not apply.

(10) In this regulation, “group sub-contractor” means a person with which the primary contractor makes a group sub-contract.

Back to top

Options/Help

Print Options

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

Explanatory Memorandum

Explanatory Memorandum sets out a brief statement of the purpose of a Statutory Instrument and provides information about its policy objective and policy implications. They aim to make the Statutory Instrument accessible to readers who are not legally qualified and accompany any Statutory Instrument or Draft Statutory Instrument laid before Parliament from June 2004 onwards.

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

Impact Assessments

Impact Assessments generally accompany all UK Government interventions of a regulatory nature that affect the private sector, civil society organisations and public services. They apply regardless of whether the regulation originates from a domestic or international source and can accompany primary (Acts etc) and secondary legislation (SIs). An Impact Assessment allows those with an interest in the policy area to understand:

  • Why the government is proposing to intervene;
  • The main options the government is considering, and which one is preferred;
  • How and to what extent new policies may impact on them; and,
  • The estimated costs and benefits of proposed measures.
Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as made version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources