The Single Source Regulations
Office has published updates to its pricing and reporting
guidance, following consultation with stakeholders. We've also
published our response to what stakeholders told us.
Pricing guidance
In January 2024 the SSRO published new pricing guidance to
support the implementation of changes to the single source
regulatory framework, which came into force on 1 April 2024. We
consulted stakeholders between January and April 2024, seeking
feedback on the new guidance. Following consideration of
consultation responses we have published updated guidance on:
- Alternative pricing types
- Allowable Costs
- The baseline profit rate and its adjustment
These updated guidance documents provide contracting parties
with:
- Support to use alternative pricing methods for contracts
which allows non-competitive defence contracts to be priced in
new ways. For example, an item can be priced by reference to
competitive markets: simplifying and speeding up procurement.
- More flexibility and transparency through broadening the
ability for a contract to be split into different components or
parts, each with its own profit rate and price (known as
componentisation). This allows contract prices to better reflect
the risk-sharing between the MOD and defence contractors.
- A rationalisation of how the contract profit
rate is calculated, removing two steps from the previous
six-step process and simplifying the agreement of contract profit
rates.
To read more about how we have responded to what stakeholders
told us during the consultation period, have a look at
the consultation
response.
Reporting guidance
Alongside the pricing guidance, we have also published our
response to the consultation on the updated reporting guidance,
which helps contractors submit statutory reports following the
legislative changes made on 1 April 2024. The consultation also
included minor changes to the compliance methodology.
We issued the guidance and the proposed change to the compliance
methodology in advance of concluding this consultation to give
stakeholders time to familiarise themselves as early as possible
and to allow their feedback to be based on initial use.
Stakeholders were generally supportive of the changes which the
SSRO has made.
Following consideration of consultation responses we have
published updated reporting guidance on:
- Contract reports.
- Supplier reports.
- DefCARS functionality.
To read more about how we have responded to what stakeholders
told us during the consultation period, have a look at
the consultation response.
An explanation of the changes made across the three guidance
documents are explained in Appendix 1 of the consultation
response document.
Application of the guidance
This new and updated pricing and reporting guidance will apply to
qualifying defence contracts and qualifying sub-contracts entered
into or amended from 10 October 2024.
To assist stakeholders in understanding the guidance changes, we
have included in the consultation response document a table that
shows where the previous guidance text has been revised.
Queries relating to the guidance should be addressed
to helpdesk@ssro.gov.uk.
