Allowable Costs guidance (version 5.1)
The Allowable Costs guidance is statutory guidance to which the Ministry of Defence and its contractors must have regard when determining whether costs are Allowable in qualifying defence contracts.
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The Defence Reform Act 2014 (the Act) requires that qualifying defence contracts (QDCs) and qualifying sub-contracts (QSCs) are priced on the basis of Allowable Costs. Section 20(1) of the Act stipulates that the SSRO must issue guidance about determining whether costs are Allowable Costs under QDCs and QSCs, and the Ministry of Defence and its contractors must have regard to it, as specified in Section 20(3) of the Act.
This version of the guidance (version 5.1) was published on 29 September 2021 and applies to QDCs and QSCs agreed on or after 29 September 2021.
It incorporates changes to the guidance on sunk and committed costs following a public consultation.
Queries relating to the guidance should be addressed to helpdesk@ssro.gov.uk. The SSRO helpdesk is unable to provide advice on contract-specific queries but referrals to the SSRO can be made for an opinion or determination on specific contract-related matters.