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Detail of outcome
As part of the SSRO’s work programme, which is set out in the Corporate Plan 2019-2022, the SSRO reviewed two sections of its existing statutory guidance on Allowable Costs during 2019. These sections were:
- risk-related costs (Part H); and
- insurance (Part E.5).
We engaged with stakeholders on these aspects of the guidance during Summer 2019 and consulted publicly on proposed guidance changes from October to December 2019. We received 8 responses to our consultation, which we have considered in finalising the changes to guidance published here.
The summary of consultation responses available above explains how the feedback provided by stakeholders has informed the final guidance in these areas.
The revised guidance will apply to qualifying defence contracts and qualifying sub-contracts entered into on and after 1 April 2020, replacing the existing guidance in those areas.
We will incorporate the changes into the SSRO’s existing guidance on Allowable Costs and re-publish this document in full on our website in March 2020. The documents are published to allow the MOD and prospective contractors to familiarise themselves with the revised guidance in advance of date of application.
The SSRO is consulting on proposed changes to its guidance on Allowable Costs in qualifying defence contracts (QDCs) and qualifying sub-contracts (QSCs) regulated under the Defence Reform Act 2014 (the Act) and Single Source Contract Regulations 2014.
This consultation is open to anyone with an interest in ensuring that good value for money is obtained in government expenditure on QDCs and QSCs and that the prices paid are fair and reasonable to contractors. We particularly welcome comments from individuals or organisations with an interest in (non-competitive) defence procurement.
The consultation focuses on proposed changes to two areas of the guidance reviewed in 2019:
- Part H – which addresses how uncertainty in cost estimates should be taken into account in determining Allowable Costs; and
- Part E.5 – which addresses circumstances in which the costs of insurance might be determined to be Allowable Costs.
To assist stakeholders in understanding the proposed changes, the consultation document clearly shows where the existing guidance text has been revised, deleted or added, and the purpose of the changes proposed.
The proposals for change have been informed by group and bilateral discussions with stakeholders and by the responses we received to a working paper on the topics issued in summer 2019 to the SSRO’s Operational Working Group, whose members are from the Ministry of Defence, ADS Group Ltd and individual defence contractors. We have published a summary of the responses we received to our working paper alongside the consultation document.
The consultation runs until 6 December 2019.
Completed response forms should be sent:
- by email to email@example.com (preferred); or
- by post to SSRO, Finlaison House, 15-17 Furnival Street, London, EC4A 1AB.
The SSRO also welcomes the opportunity to meet with stakeholders to discuss the proposals during the consultation period. If you wish to arrange a discussion, please contact David Pottruff at the earliest opportunity via firstname.lastname@example.org.